Subsidies and the Persistence of Technology Adoption: Field Experimental Evidence from Mozambique

45 Pages Posted: 8 Sep 2014 Last revised: 3 Jun 2021

See all articles by Michael Carter

Michael Carter

University of California, Davis

Rachid Laajaj

Université d'Auvergne - Clermont 1; World Bank Group

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; National Bureau of Economic Research (NBER); University of Michigan at Ann Arbor - Department of Economics

Date Written: September 2014

Abstract

We report the results of a randomized experiment testing impacts of subsidies for modern agricultural inputs in rural Mozambique. One-time provision of a voucher for fertilizer and improved seeds leads to substantial increases in fertilizer use, which persist through two subsequent agricultural seasons. Voucher receipt also leads to large, persistent increases in household agricultural production and market sales, per capita consumption, assets, durable good ownership, and housing improvements.Consistent with learning models of the adoption decision, we find positive treatment effects on farmers' estimated returns to the input package. We also document positive cross-household treatment spillovers: one's own fertilizer use rises in the number of social network members receiving vouchers. Our findings are consistent with theoretical models predicting persistence of impacts of temporary technology adoption subsidies, in particular due to learning effects.

Suggested Citation

Carter, Michael and Laajaj, Rachid and Yang, Dean, Subsidies and the Persistence of Technology Adoption: Field Experimental Evidence from Mozambique (September 2014). NBER Working Paper No. w20465, Available at SSRN: https://ssrn.com/abstract=2492975

Michael Carter (Contact Author)

University of California, Davis ( email )

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Rachid Laajaj

Université d'Auvergne - Clermont 1 ( email )

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World Bank Group ( email )

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Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

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HOME PAGE: http://www.umich.edu/~deanyang/

National Bureau of Economic Research (NBER)

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University of Michigan at Ann Arbor - Department of Economics

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