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

58 Pages Posted: 7 Jan 2019

See all articles by Asad Islam

Asad Islam

Monash University - Department of Economics

Philip Ushchev

HSE University

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 2018

Abstract

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

Keywords: randomized controlled trial (RCT), risk attitude, Technology adoption

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 2018). CEPR Discussion Paper No. DP13419, Available at SSRN: https://ssrn.com/abstract=3310344

Asadul Islam (Contact Author)

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

HSE University ( email )

3a Kantemirovskaya St, room 405
123 Griboedov Canal Embankment, room 123
Saint-Petersburg, Saint Petersburg 191119
Russia

HOME PAGE: http://https://sites.google.com/site/philipushchev/

Yves Zenou

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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