Agricultural Technology and Poverty Reduction: A Micro-Level Analysis of Causal Effects
Centro Studi Luca D'Agliano Development Studies Working Paper No. 179
37 Pages Posted: 21 May 2005
Date Written: November 2003
Agricultural technology opens great opportunities of increasing food grain production in land scarce countries. But questions are raised about the potential adverse or favourable impact of new technology on economic conditions of the poor. This study is aimed at contributing to the debate about the relative importance of "direct effects" of agricultural technology adoption in poverty alleviation strategies. It does so through an empirical investigation of the relationship between technological change, of the Green Revolution type, and wellbeing of smallholder farm households in two rural Bangladeshi regions. The paper tackles a methodological issue in assessing the "causal effect" of technological change on farm-households' income through the non-parametric p-score matching approach. It pursues a targeted evaluation of whether adopting a modern seed technology causes resource-poor farmers to improve their income and decrease the propensity to fall below the poverty line. It finds a robust and positive effect of agricultural technology adoption on farm households' wellbeing suggesting that there is a large scope for enhancing the role of agricultural technology in "directly" contributing to poverty alleviation.
Keywords: Farm household behaviour, technology adoption, poverty alleviation, propensity score matching
JEL Classification: 132, O33, Q12
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