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Improved Rice Technology Adoption: The Role of Spatially-Dependent Risk Preference

Lookup NU author(s): Dr Francisco Areal

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This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).


Abstract

This study analyses farmers’ adoption of improved rice technology, taking into account farmers’ risk preferences; the unobserved spatial heterogeneity associated with farmers’ risk preferences; farmers’ household and farm characteristics; farm locations, farmers’ access to information, and their perceptions on the rice improved varieties (i.e., high yield varieties, HYV). The study used data obtained from field experiments and a survey conducted in 2016 in Nigeria. An instrumental-variable probit model was estimated to account for potential endogenous farmers’ risk preference in the adoption decision model. Results show that risk averse (risk avoidant) farmers are less likely to adopt HYV, with the spatial lags of farmers’ risk attitudes found to be a good instrument for spatially unobserved variables (e.g., environmental and climatic factors). We conclude that studies supporting policy action aiming at the diffusion of improved rice varieties need to collect information, if possible, on farmers’ risk attitudes, local environmental and climatic conditions (e.g., climatic, topographic, soil quality, pest incidence) in order to ease the design and evaluation of policy actions on the adoption of improved agricultural technology.


Publication metadata

Author(s): Ambali OI, Areal FJ, Georgantzis N

Publication type: Article

Publication status: Published

Journal: Agriculture

Year: 2021

Volume: 11

Issue: 8

Online publication date: 22/07/2021

Acceptance date: 19/07/2021

Date deposited: 25/08/2021

ISSN (electronic): 2077-0472

Publisher: MDPI AG

URL: https://doi.org/10.3390/agriculture11080691

DOI: 10.3390/agriculture11080691


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