Underground Knowledge: Estimating the Impacts of Soil Information Transfers through Experimental Auctions
Murphy, D.M., Roobroeck, D., Lee, D.R. and Thies, J. (2020), Underground Knowledge: Estimating the Impacts of Soil Information Transfers Through Experimental Auctions. Amer. J. Agr. Econ., 102: 1468-1493. doi:10.1111/ajae.12101
124 Pages Posted: 12 Dec 2019 Last revised: 29 Sep 2020
Date Written: November 15, 2019
Soil degradation, a serious environmental problem in many developing countries, often necessitates the use of fertilizers to improve crop yields. However, smallholders usually do not have sufficient information about their soil nutrient levels to make profit-maximizing decisions about fertilizer usage. We conducted two-round experimental auctions to determine whether providing information and fertilizer recommendations from inexpensive soil testing kits to farmers in western Kenya affected their behavior and ability to optimize their input choices. We auctioned organic and inorganic agricultural inputs, dividing farmers into information treatments, and analyzed the data using double and triple difference estimations. We find that providing soil information has significant effects on farmers’ willingness to pay for inputs. We then use Monte Carlo simulations to show that there is potential for high net benefits to farmers from individualized soil tests. These results suggest that soil testing can be a cost-effective method to increase food security in the region.
Keywords: Organic inputs, fertilizer, experimental auctions, information transfers, Kenya, soil fertility
JEL Classification: Q12, O13, Q24, D83, C93
Suggested Citation: Suggested Citation