Hurdles to Adoption of Drought-Tolerant Maize
Abstract: Traditional varieties of maize frequently fail due to drought pressure in East Africa, yet farmers are slow to adopt new drought-tolerant varieties. One reason is that both the risk and returns from adopting drought-tolerant maize depend on irregular exogenous weather outcomes. A farmer’s adoption decision is based on his subjective beliefs about the likelihood of drought and the crop response to drought stress. Updating such beliefs is a slow process because severe drought can mask the trait advantage, and droughts that showcase this advantage are less frequent than drought in general. Drought-tolerant maize can improve household welfare through increased yield stability and income security, yet there is not widespread adoption. I develop a learning model to show the role of expectations in the adoption decision explaining the limited uptake under normal learning conditions. Then, combining rich household survey data with high-resolution climate and yield data, I give empirical evidence on adoption behavior, suggesting that if improved varieties are a useful intervention, uptake must be supported by promotion activities and risk mitigating tools such as crop insurance.
Here are my slides for the AAEA 2018 Risk and Uncertainty Lightning Session.