2014
DOI: 10.1111/agec.12118
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The impact of water price uncertainty on the adoption of precision irrigation systems

Abstract: The paper examines whether a firm is more or less likely to adopt conservation technology when input prices are stochastic. The results are critical to determining whether programs and contracts that reduce input price uncertainty may deter the adoption of conservation practices. An economic model of the technology adoption decision shows that the net effect of input price risk is ambiguous and depends on several factors: the mean price effect, the shutdown effect, and the risk aversion effect. Results are est… Show more

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Cited by 27 publications
(15 citation statements)
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“…Use of natural and quasi‐experimental approaches to identify causal relationships originated in labor economics (LaLonde, ; Card, ) and subsequently spread into other economic fields, including environmental economics (Chay & Greenstone, , ; Fabrizio et al, ). These approaches have been used by water resources economists to characterize water demand (Buck et al, ; Schoengold & Sunding, ; Schoengold et al, ) and to study the welfare and economic impact of water provision (Buck et al, , ; Duflo & Pande, ; Schlenker et al, ). Use of natural and quasi‐experiments to support causal empirical research in sociohydrology is emerging, particularly in data‐scarce regions.…”
Section: Problem 1: Empirical Causal Inferencementioning
confidence: 99%
“…Use of natural and quasi‐experimental approaches to identify causal relationships originated in labor economics (LaLonde, ; Card, ) and subsequently spread into other economic fields, including environmental economics (Chay & Greenstone, , ; Fabrizio et al, ). These approaches have been used by water resources economists to characterize water demand (Buck et al, ; Schoengold & Sunding, ; Schoengold et al, ) and to study the welfare and economic impact of water provision (Buck et al, , ; Duflo & Pande, ; Schlenker et al, ). Use of natural and quasi‐experiments to support causal empirical research in sociohydrology is emerging, particularly in data‐scarce regions.…”
Section: Problem 1: Empirical Causal Inferencementioning
confidence: 99%
“…Following most technology adoption studies that use discrete choice models (e.g., Green and Sunding, 1997; Negri and Brooks, 1990; Schoengold and Sunding, 2014), the propensity of producer i to choose technology/WMP package j for crop k is an unobserved latent variable that is linear in climate variables contained in the vector C and a set of control variables contained in the vector Z : where ε ijk is an unobserved random component that is often assumed to follow the logistic distribution. The observed producer choice, y ijk , equals 1 if y* ikj > 0 and equals 0 if y* ikj ≤ 0.…”
Section: Empirical Specificationmentioning
confidence: 99%
“…In some cases, farmers with better soil quality may adopt earlier than those with poorer soil (Fuglie & Kascak, 2001). However, practices could also be adopted earlier for lower-quality soil where the marginal gains from adoption are greater (Schoengold & Sunding, 2014;Wade & Claassen, 2017).…”
Section: Introductionmentioning
confidence: 99%