Vesall Nourani is a PhD Candidate in Economics at Cornell University and a National Science Foundation Graduate Research Fellow; he is on the job market this year
It’s the mid 1990’s in Ghana and pineapple farmers are learning how to properly apply fertilizer by seeking advice from their friends. It is obvious to many that the high profit margins from pineapple farming are making residents in some villages wealthier; however, in other villages this relationship is not so clear – despite the rising demand for pineapple from export markets, some pineapple farmers have disadopted (stopped farming) the crop. Their decision is noticed by all village residents. After all, disadopters have expended much time and energy to first plant and then remove a perennial sucker plant from their fields. Something must not have gone as planned! A farmer who was once considering planting pineapple himself takes others’ disadoption as a warning and no longer considers pineapple worthy of his attention.
Contribution#1: Farmers Learn from Disadopters of a New Crop
There is a large literature that examines whether farmers are influenced to adopt new technologies from peer experiences (Foster and Rosenzweig, 1995; Munshi, 2004; Bandiera and Rasul, 2006; Conley and Udry, 2010). Nevertheless, the main narrative in this literature does not account for the possibility of disadoption and, consequently, the possibility that one learns from disadopters. The main narrative goes something like this: a new crop variety is assumed to be unambiguously more profitable than traditional varieties, but lack of production knowledge prevents its widespread adoption. When opportunities for learning start to emerge – e.g., someone in a social network adopts a new crop – farmers gain production knowledge, which allows them to benefit from the new variety.
As someone who (for better or worse) resists the latest fads, I find the assumption of superiority of new technologies somewhat troubling. Indeed, there are well-founded reasons to feel this way: new technologies do not always provide positive returns to farmers (see Duflo et. al (2008), Marenya and Barrett(2009), Suri (2011) and Magnan et. al (2015) among others). Therefore, rational farmers should have no reason to believe in the superiority of a new variety prior to adopting. A farmer who adopts a new crop variety and subsequently experiences consistently lower profits than expected will likely stop using (disadopt) the new variety. How do we introduce the social influence of disadopters into a model of social learning? Continue reading