Farmers' Heterogeneous Valuation of Laser Land Leveling in Eastern Uttar Pradesh: An Experimental Auction to Inform Segmentation and Subsidy Strategies

Abstract

Demand heterogeneity often makes it profitable for firms to price and promote goods and services differently in different market segments. When private consumption brings public benefits, this same heterogeneity can be used to develop targeted public subsidies. We explore the design of public-private targeting and segmentation strategies in the case of a resourceconserving agricultural technology in India. To understand farmers' heterogeneous demand for Laser Land Leveling (LLL), we conducted an experimental auction for LLL services with an integrated randomized control trial to estimate the private benefits of the technology. We use graphical and econometric approaches to characterize farmer demand for LLL. We then add detailed cost data from LLL providers to simulate and evaluate several potential targeted delivery strategies based on measures of cost effectiveness of expanded diffusion of LLL and market surplus in a welfare framework. These simulations demonstrate inherent tradeoffs between increasing the amount of land that is leveled and expanding the number of farmers adopting the technology. While segmenting and targeting are popular elements of many publicprivate partnerships to develop and disseminate agricultural technologies, formulating and implementing effective delivery strategies requires a rich understanding of costs, benefits and demand. Our experimental approach generates such an understanding and may be relevant in other contexts.2

Constraints in Adoption of Laser Land Levelling Technology in Haryana

“…It showed that adopters were equally from each category of land holding size showing scale neutrality and non-biasedness of laser land levelling towards large farmers. Lybbert et al, (2012) in their study observed similar results. There were different costs of hiring of laser leveller under various agencies.…”

Land gradient and configuration effects on yield, irrigation amount and irrigation water productivity in rice-wheat and maize-wheat cropping systems in Eastern India

“…With larger plots under the SFLF model, irrigations will take longer if supply flow rates are not increased proportionate to the increase in field size, with potential negative effects on yield and WPi from increased waterlogging and longer irrigation time. The study conducted by ( Lybbert et al, 2013 ) in eastern Uttar Pradesh (a neighbouring state of Bihar with similar agricultural landscape including plot size), highlighted an interesting perspective on "willingness to pay" as the main driver for the adoption of laser land levelling rather than plot size. The smallest plot size in their study was ~800 m 2 (compared with ~600 m 2 in our study).…”

Community Participation and Preferences Regarding Conservation and Development Policies in China’s Giant Panda Nature Reserves

“…However, the conditional logit model assumes that farmers prefer homogeneity and random items are identical and independent. However, this may be biased by the independence of irrelevant choices [52], and the farmer homogeneity hypothesis differs from reality, with farmers' preferences being heterogeneous [53,54]. To this end, the mixed logit model is considered a more appropriate method to study the decision-making behavior of farmers with heterogeneous preferences.…”