The Value of Information in Technology Adoption

64 Pages Posted: 14 Oct 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

Abstract

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

Keywords: Bayesian model, technology adoption, peers, 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. IZA Discussion Paper No. 12672, Available at SSRN: https://ssrn.com/abstract=3468620

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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