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The Effects of Risk and Ambiguity Aversion on Technology Adoption: Evidence from Aquaculture in Ghana

Crentsil, Christian, Gschwandtner, Adelina, Wahhaj, Zaki (2020) The Effects of Risk and Ambiguity Aversion on Technology Adoption: Evidence from Aquaculture in Ghana. Journal of Economic Behavior and Organization, 179 . pp. 46-68. ISSN 0167-2681. E-ISSN 0167-2681. (doi:10.1016/j.jebo.2020.07.035) (Access to this publication is currently restricted. You may be able to access a copy if URLs are provided) (KAR id:82319)

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http://dx.doi.org/10.1016/j.jebo.2020.07.035

Abstract

We study how aversion to risk and ambiguity affects the adoption of new technologies by Ghanaian smallholder aquafarmers. We conduct a set of field experiments designed to elicit farmers’ risk and ambiguity preferences and combine it with survey based information on their technology adoption decisions. We find that aquafarmers who are more risk-averse were quicker to adopt the new technologies: a fast-growing breed of tilapia fish, extruded feed and floating cages. By contrast, ambiguity aversion has no effect on the adoption of the new tilapia breed and extruded feed. Furthermore, it slows down the adoption of floating cages - a technology which entails higher fixed costs than the others - and the effect is diminishing in the number of other adopters in the village. We argue that these differential effects are due to the fact that the technologies are risk-reducing, with potential ambiguity about their payoffs? distributions at the early stages of adoption. The findings highlight the importance of distinguishing between risk and ambiguity in investigating technology adoption decisions of small-holder farmers in developing countries.

Item Type: Article
DOI/Identification number: 10.1016/j.jebo.2020.07.035
Additional information: School of Economics Discussion Paper 18/14
Uncontrolled keywords: Uncertainty Aversion, Aquafarming, Technology Adoption, Extruded Feed, Floating Cages, Akosombo strain of Tilapia (AST)
Subjects: H Social Sciences
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Adelina Gschwandtner
Date Deposited: 31 Jul 2020 10:59 UTC
Last Modified: 07 Sep 2020 13:39 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/82319 (The current URI for this page, for reference purposes)
Gschwandtner, Adelina: https://orcid.org/0000-0002-6952-1782
Wahhaj, Zaki: https://orcid.org/0000-0001-8285-7670
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