Microeconomics of Technology Adoption

There is an emerging consensus among macro-economists that differences in technology across countries accounts for the major differences in per-capita GDP and the wages of workers with similar skills across countries. Accounting for differences in technology levels across countries thus can go a long way towards understanding global inequality. One mechanism by which poorer countries can catch up with richer countries is through technological diffusion, the adoption by low-income countries of the advanced technologies produced in high-income countries. In this survey, we examine recent micro studies that focus on understanding the adoption process. If technological diffusion is a major channel by which poor countries can develop, it must be the case that technology adoption is incomplete or the inputs associated with the technologies are under-utilized in poor, or slow-growing economies. Thus, obtaining a better understanding of the constraints on adoption are useful in understanding a major component of growth.technology adoption, review

RISK MANAGEMENT THROUGH INSURANCE AND ENVIRONMENTAL EXTERNALITIES FROM AGRICULTURAL INPUT USE: AN ITALIAN CASE STUDY

The biological nature of agricultural production processes induce a higher degree of uncertainty surrounding the economic performance of farm enterprises. This has contributed to the development and acceptance of forms of public intervention aimed at reducing income variability that have no parallel in other sectors of the economy. In particular, subsidized crop insurance are a widely used tool. The impact of these programs on the decisions of production generates effects on input use, land use and thus, indirectly, environmental outcomes. The importance of this issue has grown in parallel with the growth in importance of the collective role of agriculture sector that has addressed the recent guidelines adopted by many developed countries. To examine the effects of public risk management programs on optimal nitrogen fertilizer use and land allocation to crops, this study carried out an empirical analysis by developing a mathematical programming model of a representative wheat-tomato farm in Apulia southern region of Italy. The model endogenizes nitrogen fertilizer rates and land allocation, as well as the insurance coverage levels, participation in insurance programs and the Environmental Payment (EP). This study utilized direct expected utility maximizing non-linear programming in combination with a simulation approach. Results show that with current crop insurance programs, the optimal nitrogen fertilizer rate slightly increases and the optimal acreage substantially increases for tomato whereas decrease for wheat. Assuming that the environmental negative effects of crop insurance are positively related to nitrogen fertilizer use, this type of public intervention implies negative environmental effects.Uncertainty, Risk Management, Crop Insurance, Input Use Decisions, Environmental Externalities, Mathematical Programming., Agricultural and Food Policy, Environmental Economics and Policy, Research Methods/ Statistical Methods, Risk and Uncertainty, Q10, Q14,

RISK, GOVERNMENT PROGRAMS, AND THE ENVIRONMENT

Nearly all farm business ventures involve financial risk. In some instances, private and public tools used to manage financial risks in agriculture may influence farmers' production decisions. These decisions, in turn, can influence environmental quality. This bulletin summarizes research and provides some perspective on private and public attempts to cope with financial risks and their unintended environmental consequences. Specifically, it examines the conceptual underpinnings of risk-related research, challenges involved with measuring the consequences of risk for agricultural production decisions, government programs that influence the risk and return of farm businesses, and how production decisions influence both the environment and the risk and average returns to farming.risk, agricultural production, government programs, environment, Agricultural and Food Policy, Environmental Economics and Policy, Risk and Uncertainty,

Economics of the Greenseeder Hand Planter, Discrete Choice Modeling, and On-Farm Field Experimentation

Corn yields in developing countries are lower than in developed countries partly due to planting methods that involve hand dropping of multiple seeds per hill. Researchers from Oklahoma State University (OSU) recently developed the Greenseeder Hand Planter (GHP) to replace such methods. The first essay determines economic breakeven levels of seed and labor savings, increases in corn yield, and reduced loss of N through reduced ammonia volatilization. Results suggest a $50 GHP used to plant 3 hectares per year would need to increase corn yields on average by about 1.12%, use 12.19% fewer seeds, or reduce labor man-days by 38.66% to equal expected net returns from traditional methods.In the second essay, I conduct Monte Carlo experiments to measure bias in the conditional logit (CL) and independent availability logit (IAL) when there is no choice set formation and when choice sets are stochastically formed. I also compare the performance of the two models using empirical data on paddlefish angler preferences collected in Oklahoma. Both the CL and IAL work well when their own assumptions hold, but not under the alternative's assumptions. However, the IAL produces unbiased and less efficient parameter estimates when individuals actually choose from the full set of alternatives. Empirical results suggest the IAL is able to predict the attribute-cutoff.To avoid limitations from small-scale agronomic trials, there has been a movement toward large-scale, on-farm field trials but questions remain as how best to conduct them and when it is most profitable to quit them. The third essay addresses these questions by using a fully Bayesian decision-theoretic approach. Data are from Monte Carlo simulations assuming a corn-input stochastic plateau production function. Results suggest the best way to conduct such experiments is to allocate to each of the 10% of the plots, 0 lb. of N, half of N*, and 150% of N* under a 30-plot experimental design. Results further indicate that it optimal to quit such trials in year 2. Sensitivity analysis confirms the optimal quit period but suggests such experiments are most profitable by allocating unalike N levels to all of the 30% of experimental plots

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Teaching/Communication/Extension/Profession,

MOVING FROM UNIFORM TO VARIABLE FERTILIZER RATES ON IOWA CORN: EFFECTS ON RATES AND RETURNS

This study develops a model based on the yield potential of various soil types in 12 Iowa counties to estimate the potential value of switching from uniform to variable fertilizer rates. Results indicate modest increases in the gross returns over fertilizer costs, ranging from $7.43 to$1.52 per acre. The net profitability of variable-rate technology (VRT) is sensitive to the per acre costs of moving to a VRT program. Under the assumptions of the model, applying variable rates would increase yield by 0.05 to 0.5 bushels per acre, and would reduce fertilizer costs by $1.19 to$6.83 per acre.Crop Production/Industries,

The Value of Regional Annual Nitrogen Needs Information for Wheat Producers in Oklahoma

Crop producers are increasingly interested in reducing nitrogen use without sacrificing yield. Technology is available for precise application at the sub-field level, but adoption has been sluggish. This paper estimates the relative profitability of a field level annual predictor of mid-season N requirements and a regional predictor of the same.nitrogen seeds, nitrogen use efficiency, precision agriculture, wheat, Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies,