Technological Innovations, Downside Risk, and the Modernization of Agriculture
Kyle Emerick, Alain de Janvry, Elisabeth Sadoulet, Manzoor H. Dar
American Economic Review · 2016 · Volume 106 · Issue 6
Abstract
We use a randomized experiment in India to show that improved technology enhances agricultural productivity by crowding in modern inputs and cultivation practices. Specifically, we show that a new rice variety that reduces downside risk by providing flood tolerance has positive effects on adoption of a more labor-intensive planting method, area cultivated, fertilizer usage, and credit utilization. We find that a large share of the expected gains from the technology comes from crowding in of other investments. Therefore, improved technologies that reduce risk by protecting production in bad years have the potential to increase agricultural productivity in normal years.
Keywords
Economic Development: Agriculture, Natural Resources, Energy, Environment, Other Primary Products, Technological Change: Choices and Consequences, Diffusion Processes, Agricultural Finance, Land Ownership and Tenure, Land Reform, Land Use, Irrigation, Agriculture and Environment, Agricultural R&D, Agricultural Technology, Biofuels, Agricultural Extension Services
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