ARE at AAEA: Laura Paul: Rain on the Parade: hurdles to adoption of maize with weather-contingent advantages
July 31, 2018
Time: 2:45–4:15 p.m. Monday, Aug. 6
Location: PM Room: Wilson C
Both the risk and returns from adopting drought-tolerant maize depend on exogenous weather outcomes. Subjective beliefs about the likelihood of drought and the response of maize to water stress are key to a farmer’s adoption decision, but updating beliefs is a slow process. Drought-tolerant maize can improve household welfare through increased yield stability and income security. However, adoption of drought-tolerant maize is slowed by subjective beliefs about weather and the difficulty of observing the yield response to drought. In this paper, I analytically characterize the role of subjective expectations in weather-contingent technology adoption. Combining rich household survey data with high-frequency spatial climate and yield data, I empirically test this adoption model to show the role of expectations in decision making.
*This is information about one of the 17 people from ARE with a presentation at the 2018 AAEA Annual Meeting Aug. 5–7 in Washington, D.C.
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