The Value of Information in Technology Adoption: Theory and Evidence from Bangladesh

55 Pages Posted: 9 Jan 2019

See all articles by Asad Islam

Asad Islam

Monash University - Department of Economics

Philip Ushchev

National Research University Higher School of Economics

Yves Zenou

Monash University - Department of Economics; Stockholm University; Research Institute of Industrial Economics (IUI); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Xin Zhang

Monash University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 17, 2018

Abstract

We develop a theoretical model in which farmers' adoption decisions are based on their degree of risk aversion and on the information about the quality of a new technology received from other farmers. To test the predictions of this model, we run a field experiment in Bangladesh. We show that (treated) farmers who receive more training in terms of the quality of the System of Rice Intensification (SRI) technology, and thus have more accurate information about this technology, have a higher impact on the adoption rate of the untreated farmers. We also find that more risk-averse untreated farmers tend to adopt less and are less influenced by their treated peers. Finally, a trained farmer's impact on his untrained peers increases if he adopts himself the SRI technology. Our results thus indicate that the crucial determinant of technology adoption for untreated farmers is their degree of risk aversion and the accuracy and reliability of the information transmission about the quality of the technology circulated among farmers.

Keywords: Bayesian model, information, technology adoption, risk attitude, RCT, Bangladesh

JEL Classification: O13, Z13

Suggested Citation

Islam, Asadul and Ushchev, Philip and Zenou, Yves and Zhang, Xin, The Value of Information in Technology Adoption: Theory and Evidence from Bangladesh (December 17, 2018). Available at SSRN: https://ssrn.com/abstract=3302358 or http://dx.doi.org/10.2139/ssrn.3302358

Asadul Islam

Monash University - Department of Economics ( email )

Department of Economics
Monash University
Caulfield East, Victoria
Australia
+61399032783 (Phone)

HOME PAGE: http://users.monash.edu/~asaduli/

Philip Ushchev

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Yves Zenou (Contact Author)

Monash University - Department of Economics ( email )

Australia

Stockholm University ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

Research Institute of Industrial Economics (IUI) ( email )

P.O. Box 5501
S-114 85 Stockholm
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Xin Zhang

Monash University - Department of Economics ( email )

Australia
0452220939 (Phone)

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