Consumption risk, technology adoption and poverty traps: evidence from Ethiopia.
Much has been written on the determinants of input and technology adoption in agriculture, with issues such as input availability, knowledge and education, risk preferences, profitability, and credit constraints receiving much attention. This paper focuses on a factor that has been less well documen...
| Main Authors: | , |
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| Format: | Working paper |
| Language: | English |
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CSAE (University of Oxford)
2007
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| _version_ | 1797075459433824256 |
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| author | Dercon, S Christiaensen, L |
| author_facet | Dercon, S Christiaensen, L |
| author_sort | Dercon, S |
| collection | OXFORD |
| description | Much has been written on the determinants of input and technology adoption in agriculture, with issues such as input availability, knowledge and education, risk preferences, profitability, and credit constraints receiving much attention. This paper focuses on a factor that has been less well documented: the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests. Building on an explicit model, this is explored in panel data for Ethiopia. Historical rainfall distributions are used to identify the counterfactual consumption risk. Controlling for unobserved household and time-varying village characteristics, it emerges that not just exante credit constraints, but also the possibly low consumption outcomes when harvests fail, discourage the application of fertiliser. The lack of insurance causes inefficiency in production choices. |
| first_indexed | 2024-03-06T23:50:41Z |
| format | Working paper |
| id | oxford-uuid:727cbcfb-aec3-4243-af13-d6df3e8681b5 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T23:50:41Z |
| publishDate | 2007 |
| publisher | CSAE (University of Oxford) |
| record_format | dspace |
| spelling | oxford-uuid:727cbcfb-aec3-4243-af13-d6df3e8681b52022-03-26T19:50:23ZConsumption risk, technology adoption and poverty traps: evidence from Ethiopia.Working paperhttp://purl.org/coar/resource_type/c_8042uuid:727cbcfb-aec3-4243-af13-d6df3e8681b5EnglishDepartment of Economics - ePrintsCSAE (University of Oxford)2007Dercon, SChristiaensen, LMuch has been written on the determinants of input and technology adoption in agriculture, with issues such as input availability, knowledge and education, risk preferences, profitability, and credit constraints receiving much attention. This paper focuses on a factor that has been less well documented: the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests. Building on an explicit model, this is explored in panel data for Ethiopia. Historical rainfall distributions are used to identify the counterfactual consumption risk. Controlling for unobserved household and time-varying village characteristics, it emerges that not just exante credit constraints, but also the possibly low consumption outcomes when harvests fail, discourage the application of fertiliser. The lack of insurance causes inefficiency in production choices. |
| spellingShingle | Dercon, S Christiaensen, L Consumption risk, technology adoption and poverty traps: evidence from Ethiopia. |
| title | Consumption risk, technology adoption and poverty traps: evidence from Ethiopia. |
| title_full | Consumption risk, technology adoption and poverty traps: evidence from Ethiopia. |
| title_fullStr | Consumption risk, technology adoption and poverty traps: evidence from Ethiopia. |
| title_full_unstemmed | Consumption risk, technology adoption and poverty traps: evidence from Ethiopia. |
| title_short | Consumption risk, technology adoption and poverty traps: evidence from Ethiopia. |
| title_sort | consumption risk technology adoption and poverty traps evidence from ethiopia |
| work_keys_str_mv | AT dercons consumptionrisktechnologyadoptionandpovertytrapsevidencefromethiopia AT christiaensenl consumptionrisktechnologyadoptionandpovertytrapsevidencefromethiopia |