Dynamics of Agricultural Technology Adoption.pdf

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Dynamics of Agricultural Technology Adoption: Age Structure, Reversibility, and UncertaintyAuthor(s): Kenneth A. Baerenklau and Keith C. KnappSource: American Journal of Agricultural Economics, Vol. 89, No. 1 (Feb., 2007), pp. 190-201Published by: on behalf of theOxford University Press Agricultural & Applied EconomicsAssociationStable URL: http://www.jstor.org/stable/4123572Accessed: 05-03-2016 11:33 UTC

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2/13

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3/13

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4/13

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5/13

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U, = 0. we are assuming producers face a global cotton price.

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6/13

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7/13

BaerenkauandKnappTechnoogyAdoptonAge Reversb ty Uncertanty195

U Ad p D p

C o R n F u rr ow

b

C n p / b

Figure 2 Optimal adoption rule for a one-year-old furrow system

aboveF gure2showsthathgherwaterand

cotton prces where water has both a hgh

m a rg n a c os t a n d a h g h v a u e m a rg na p r od -

ucttendto promoteadoptonofa drp sys-

tem even when the exst ng furrow system s

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mumwaterprceneededforadoptonofa drp

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prceneededforadoptonofa drpsystem

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a vaue beyond the upper m t of our anays s

For the maorty of key prce combnatons

the userofaone-year-od furrowsystemw

choosetoretan theexstng system Forno

prce combnatons woud a new furrow sys-

m b d p d

Theborderbetweenthedarkgrayandwhte

r e g o ns n f g u r e 2 d e f n e s a s e t o f c r t c a p r c e

parsthattraceoutan ndfferencecurvefor

technoogychocewheretheexpectedvaue

ofretanng theexstngfurrowsystemequas

theexpectedvaueofpurchasnga newdrp

system7Thesopeof thscurvesuggeststhat

theadoptondecsons reatveymoresen-

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7 A finer discretization would smooth this curve but would also

g n f n y n un m




8/13


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9/13

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Dynamics of Agricultural Technology Adoption.pdf

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