Category Archives: Social issues

335. Behavioural economics and adoption of agricultural innovations

Behavioural economics has become a thriving field of research over the past decade or so, but research by agricultural economists on farmers’ behaviour when adopting new practices has been going on for over 60 years. What is similar and different between these two fields of research?

I was listening to a presentation by David Zilberman from the University of California, Berkeley at a conference a few years ago, and he made a comment along the lines that agricultural economists had been studying behaviour for a long time before behavioural economics became popular. He was thinking about the large body of research on farmers’ adoption on new practices and technologies.

When I was putting together a recent special issue of Applied Economic Perspectives and Policy on adoption of agricultural innovations, I remembered David’s comment and thought that a paper about this would be a good inclusion. About that time I happened to visit the University of Alberta, and a conversation about this with Maik Kecinski (now at University of Delaware) led to a team of young economists (plus a not-so-young one: me) working together. The resulting paper, “Agricultural Adoption and Behavioral Economics: Bridging the Gap” by Streletskaya et al., is now out and is open access.

To get a brief overview of the paper, you could listen to a conversation with one of the co-authors, Leah Palm-Forster, who happened to be in Perth for the AARES conference last month, which luckily took place just in time to avoid most of the travel shut downs for Covid-19. My conversation with Leah is available as an episode of the AEPP podcast series.

The paper covers a lot of ground. Here I’ll just comment on some of the similarities and differences between the two fields of research. Clearly, both fields are interested in behaviour, both recognize the influence of individual characteristics, preferences, and beliefs on decision-making, and both study economic decisions. But they tend to ask somewhat different questions. Quoting from the paper:

“Agricultural adoption investigates which factors drive or inhibit uptake within a population over time, without necessarily seeking to identify and model behavioral mechanisms that influence adoption. Behavioral economics, on the other hand, seeks to identify and explain behavior that departs from what is predicted by traditional economics through the use of new theories and models of human behavior.”

“Furthermore, agricultural adoption research traditionally has highlighted the role of extrinsic factors such as social, economic, and political context in driving adoption. Behavioral economics, on the other hand, focuses on broadly unpacking the “black box” of human decision making and explores how human cognition and the manner in which tastes and preferences are formed drive decision-making, and how factors such as biases and other social influences impact economic behavior.”

“Agricultural adoption often analyzes field data available at the plot, county, regional and national levels for different types of producers in order to obtain insights about the drivers of new technology diffusion over time and adoption patterns across different farming populations. In the behavioral economics domain, … many laboratory and field experiments rely on smaller samples and consist of cross-sectional data.”

So, there are quite a few differences. But they don’t have to be different. These differences have just evolved organically, largely reflecting the different questions that the researchers were asking.

Researchers working on agricultural adoption are increasingly looking towards behavioural economics for ideas and methods, but I reckon there is also unrealised scope for cross-fertilisation in the other direction. I suspect that many behavioural economists don’t even realise that there is this other big body of research generating knowledge that is relevant to what they do.

Further reading

Streletskaya, N.A., S.D. Bell, M. Kecinski, T. Li, S. Banerjee, L.H. Palm-Forster, and D.J. Pannell. 2020. Agriculture Adoption and Behavioral Economics: Bridging the Gap. Applied Economic Perspectives and Policy 42(1), 54-66.

330. Adoption of agricultural innovations Special Issue

I’m the guest editor for a new Special Issue of the journal Applied Economic Perspectives and Policy. The theme of the issue is “Adoption of Agricultural Innovations” and it includes 11 papers by some of the world’s leading researchers on this topic.

There is an audio interview with me about the Special Issue available here.

The papers are intended to provide reviews or syntheses of key issues related to farmers’ adoption of new practices and technologies. Each paper focuses on a particular aspect of the literature, and the collection as a whole provides an excellent introduction to this enormous body of research.

A particularly nice feature is that all the papers in the issue are open access, meaning that anybody can read them without needing a subscription to the journal. You can access the issue here.

You can hear a brief interview with me providing background and an overview of the Special Issue. The interview is available as an episode of the AEPP Podcast.

Another one of the podcast episodes is another interview related to the Special Issue. In that one I interview Leah Palm-Forster about one of the papers that she and I helped to co-author, called “Agricultural Adoption and Behavioral Economics: Bridging the Gap”. In that paper we talk about the similarities and differences between those two related bodies of research literature, and about possible connections that could be made between them.

Further reading

Here’s a list of all the articles in the issue.

Pannell, D.J. and Zilberman, D. 2020. Understanding adoption of innovations and behavior change to improve agricultural policy. Applied Economic Perspectives and Policy 42(1), 3-7.

Norton, G.W. and J. Alwang. 2020. Changes in Agricultural Extension and Implications for Farmer Adoption of New Practices. Applied Economic Perspectives and Policy 42(1), 8-20.

Heiman, A., Ferguson, J. and D. Zilberman. 2020. Marketing and Technology Adoption. Applied Economic Perspectives and Policy 42(1), 21-30.

Pannell, D.J. and R. Claassen. 2020. The Roles of Adoption and Behavior Change in Agricultural Policy. Applied Economic Perspectives and Policy 42(1), 31-41.

Chavas, J.-P. and C. Nauges. 2020. Uncertainty, Learning and Technology Adoption in Agriculture. Applied Economic Perspectives and Policy 42(1), 42-53.

Streletskaya, N.A., S.D. Bell, M. Kecinski, T. Li, S. Banerjee, L.H. Palm-Forster, and D.J. Pannell. 2020. Agriculture Adoption and Behavioral Economics: Bridging the Gap. Applied Economic Perspectives and Policy 42(1), 54-66.

Weersink, A. and M. Fulton. 2020. Limits to Profit Maximization as a Guide to Behavior Change. Applied Economic Perspectives and Policy 42(1), 67-79.

Montes de Oca Munguia, O. and Llewellyn, R. 2020. The Adopters Versus The Technology: Which Matters More When Predicting or Explaining Adoption? Applied Economic Perspectives and Policy 42(1), 80-91.

Huffman, W.E. 2020. Human Capital and Adoption of Innovations: Policy Implications. Applied Economic Perspectives and Policy 42(1), 92-99.

Llewellyn, R. and B. Brown. 2020. Predicting adoption of innovations by farmers: how is it different in smallholder agriculture? Applied Economic Perspectives and Policy 42(1), 100-112.

Rola-Rubzen, F., T.R. Paris, J. Hawkins and B. Sapkota. 2020. Improving Gender Participation in Agricultural Technology Adoption in Asia: From Rhetoric to Practical Action. Applied Economic Perspectives and Policy 42(1), 113-125.

327. Heterogeneity of farmers

Farmers are highly heterogeneous. Even farmers growing the same crops in the same region are highly variable. This is often not well recognised by policy makers, researchers or extension agents.

The variation between farmers occurs on many dimensions. A random sample of farmers will have quite different soils, rainfall, machinery, access to water for irrigation, wealth, access to credit, farm area, social networks, intelligence, education, skills, family size, non-family labour, history of farm management choices, preferences for various outcomes, and so on, and so on. There is variation amongst the farmers themselves (after all, they are human), their farms, and the farming context.

This variation has consequences. For example, it means that different farmers given the same information, the same technology choices, or facing the same government policy, can easily respond quite differently, and they often do.

Discussions about farmers often seem to be based on an assumption that farmers are a fairly uniform group, with similar attitudes, similar costs and similar profits from the same practices. For example, it is common to read discussions of costs and benefits of adopting a new farming practice, as if the costs and the benefits are the same across all farmers. In my view, understanding the heterogeneity of farm economics is just as important as understanding the average.

Understanding the heterogeneity helps you have realistic expectations about how many farmers are likely to respond in particular ways to information, technologies or policies. Or about how the cost of a policy program would vary depending on the target outcomes of the program.

We explore some of these issues in a paper recently published in Agricultural Systems (Van Grieken et al. 2019). It looks at the heterogeneity of 400 sugarcane farmers in an area of the wet tropics in Queensland (the Tully–Murray catchment). These farms are a focus of policy because nutrients and sediment sourced from them are likely to be affecting the Great Barrier Reef. “Within the vicinity of the Tully-Murray flood plume there are 37 coral reefs and 13 seagrass meadows”.

Our findings include the following.

  • Different farmers are likely to respond differently to incentive payments provided by government to encourage uptake of practices that would reduce losses of nutrients and sediment.
  • Specific information about this can help governments target their policy to particular farmers, and result in the program being more cost-effective.
  • As the target level of pollution abatement increases, the cost of achieving that target would not increase linearly. Rather, the cost would increase exponentially, reflecting that a minority of farmers have particularly high costs of abatement. This is actually the result that economists would generally expect (see PD182).

Further reading

Van Grieken, M., Webster, A., Whitten, S., Poggio, M., Roebeling, P., Bohnet, I. and Pannell, D. (2019). Adoption of agricultural management for Great Barrier Reef water quality improvement in heterogeneous farming communities, Agricultural Systems 170, 1-8. Journal web page * IDEAS page

308 – Vote yes for marriage equality

Australians currently have a chance to vote for marriage equality by postal ballot. I know this is a bit off the usual topics for this blog, but it’s something I feel strongly about. If you have the right to vote, here are six reasons to vote yes.

1. Because it’s the kind and decent thing to do. It would create joy for many thousands of people without hurting anybody.

2. Because gay people still face prejudice in many forms, and still attempt suicide at higher rates than their peers. Voting yes would be one small step towards turning this around.

3. Because we should not let the religious beliefs of a minority dictate how the rest of us live our lives. There is and should be a separation of church and state in Australia. Nobody should be required to follow the dictates of a religion to which they do not voluntarily subscribe. That is the real issue of religious freedom here – quite the opposite of what some “no” advocates are claiming.

4. Because the position of some Christians against same-sex marriage is not supported by the Bible anyway (Whitaker, 2017). The Bible has vastly more to say about being kind and generous than the few vague fragments it includes on homosexuality. Nowhere does it actually proscribe same-sex marriage. In the Old Testament, it does say that a man lying with another man instead of his wife is an “abomination”. But (a) this is about adulterous sex, not marriage between a loving couple, and (b) there is an interesting list of other things that the Old Testament also describes as abominations, including wearing mixed-fabric clothing, tattoos, mocking the blind by putting obstacles in their way, and trimming your beard. Why are we not having a postal plebiscite on the trimming of beards? The highly selective focus of some Christians on homosexuality is hypocritical. Neither testament of the Bible says anything whatsoever against lesbians.

5. Because Australia is lagging behind the rest of the civilised world. Same-sex marriage is already legal in The Netherlands, Belgium, Spain, Canada, South Africa, Norway, Sweden, Portugal, Iceland, Argentina, Denmark, France, Brazil, Uruguay, New Zealand, the UK, Ireland, the US, Luxemburg, Colombia, Greenland, Finland, Slovenia, Germany and Taiwan.

6. Because this change is inevitable, and saying no now would needlessly delay us doing the right thing. It prolongs the debate and increases the number of public expressions of anti-gay prejudices.

Post your completed survey form back by 31 October to be sure of meeting the deadline.

Further reading

Whitaker, R.J. (2017). Same-sex marriage: What does the Bible really have to say? Here

304 – Predicting behaviour change by farmers

I have a new paper out describing ADOPT, the Adoption and Diffusion Outcome Prediction Tool. We’ve paid the money to make it Open Access, so I hope you will make it worth our while having done that by going to the journal web site and downloading the paper for free.

There are many hundreds of research papers on the adoption of new practices by farmers. Pretty much all of them set out to explain the relative contributions of different factors to the past adoption or non-adoption of particular practices in particular regions. There are a bunch of review papers that try to make sense of the voluminous literature (including a beauty by Pannell et al. (2006)).

However, neither the original papers nor the reviews set out to address an issue that really matters to many people working in the agricultural sector, in research, extension, natural resource management, policy, sales, etc. That issue is the likely future adoption of a new practice that has not yet been adopted. An interdisciplinary group of us set out to fill this gap by developing ADOPT.

There are a large number of users of ADOPT – there have been over 1000 downloads of the tool, and many examples where it has been used effectively in planning or evaluation of research, extension or policy.

Now we have published this paper, which describes how we developed and validated the tool, how it is structured, and some example of its use.

You can download the paper for free here and you can download the ADOPT tool for free here. If you do it quickly, you’ll be one of the first to get a new update of the model, just released on June 29.

Also available now is Version 1.0 of the “Smallholder” version of ADOPT, designed for use in developing countries. Download it from the same web site here.

Also see http://www.ruralpracticechange.net for a set of videos on the topic of farmers adopting new practices.

References

Kuehne, G., Llewellyn, R., Pannell, D.J., Wilkinson, R., Dolling, P., Ouzman, J. and Ewing, M. (2017). Predicting farmer uptake of new agricultural practices: a tool for research, extension and policy, Agricultural Systems 156, 115-125. Journal web site for free download of the paper.

Pannell, D.J. and Vanclay, F.M. (eds) (2011). Changing Land Management: Adoption of New Practices by Rural Landholders, CSIRO Publishing, Canberra. Available at the publisher’s website.

Pannell, D.J., Marshall, G.R., Barr, N., Curtis, A., Vanclay, F. and Wilkinson, R. (2006). Understanding and promoting adoption of conservation practices by rural landholders. Australian Journal of Experimental Agriculture 46(11): 1407-1424. Journal web site, or email David.Pannell@uwa.edu.au to ask for a copy.