Factor Market Failures and the Adoption of Irrigation in Rwanda

Factor market failures can limit adoption of profitable technologies. We leverage a plot-level spatial regression discontinuity design in the context irrigation use by farmers provided free access to water. Using boosts profits 43–62 percent. Yet, only irrigate 30 percent plots because labor costs. demonstrate inefficient use, showing irrigating one plot reduce their on other plots. This inefficiency is largest for smaller households and wealthier households, suggesting frictions constrain irrigation. (JEL D24, O13, Q12, Q15, Q16)