Technology Adoption Under Production Uncertainty: Theory and Application to Irrigation Technology

Posted: 20 Jul 2006

See all articles by Phoebe Koundouri

Phoebe Koundouri

Athens University of Economics and Business - Department of International and European Economic Studies; University of Reading - Department of Economics

Céline Nauges

National Institute for Agricultural Research (INRA) - Laboratoire d'Economie des Ressources Naturelles (LERNA)

Vangelis Tzouvelekas

University of Crete - Department of Economics

Abstract

We propose a theoretical framework to analyze the conditions under which a farmer facing production uncertainty (due to a possible water shortage) and incomplete information will adopt a more efficient irrigation technology. A reduced form of this model is empirically estimated using a sample of 265 farms located in Crete, Greece. The empirical results suggest that farmers choose to adopt the new technology in order to hedge against production risk. In addition, we show that the farmer's human capital also plays a significant role in the decision to adopt modern, more efficient irrigation equipment.

Suggested Citation

Koundouri, Phoebe and Nauges, Céline and Tzouvelekas, Vangelis, Technology Adoption Under Production Uncertainty: Theory and Application to Irrigation Technology. American Journal of Agricultural Economics, Vol. 88, No. 3, pp. 657-670, August 2006, Available at SSRN: https://ssrn.com/abstract=918554 or http://dx.doi.org/10.1111/j.1467-8276.2006.00886.x

Phoebe Koundouri (Contact Author)

Athens University of Economics and Business - Department of International and European Economic Studies ( email )

GR-10434 Athens
Greece
+0030 210 8203147 (Phone)
+0030 210 8214122 (Fax)

HOME PAGE: http://www.econ.ucl.ac.uk/downloads/koundouri/cv.pdf

University of Reading - Department of Economics ( email )

Reading, RG6 6AA
United Kingdom
+44 - (0)118 - 9875123 (Phone)
+44 - (0)118 - 9750236 (Fax)

HOME PAGE: http://www.rdg.ac.uk/economics/koundouri.html

Céline Nauges

National Institute for Agricultural Research (INRA) - Laboratoire d'Economie des Ressources Naturelles (LERNA) ( email )

21, Allee de Brienne
31000 Toulouse
France

Vangelis Tzouvelekas

University of Crete - Department of Economics ( email )

GR-74100 Rethymnon, GR-74100
Greece
+30-28310-77417 (Phone)
+30-28310-77406 (Fax)

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