The Economics of Water-Conserving Technology Adoption in Tunisia: An Empirical Estimation of Farmer Technology Choice*

Introduction Economic theory tells us that increases in the relative prices of natural resources should cause farmers to switch to techniques that use fewer farming resources. The adoption of resource-conserving technology is one possible response that can lead toward a more environmentally sustainable outcome. Do farmers respond to changes in natural resource prices and quality by adopting available resource-conserving technology? This article investigates a case study of decisions made by Tunisian farmers as to whether or not they should invest in water-conserving drip-irrigation technology as a function of natural resource prices and quality, along with farm and farmer characteristics. In contrast to many studies of technology adoption, this work uses both the standard revealed preference analysis of who adopts and a direct elicitation of the reasons for adoption or nonadoption by farmers. By reviving an ancient methodology—the direct question—to elicit real preferences from farmers, the research goes beyond the restrictive assumptions of the commonly used random utility models. The combination of these techniques allows triangu-lation on the causes of technology adoption and helps insure that the results are more than a statistical artifact. The survival and continued growth of the economy of Tunisia as well as that of other North African countries depends vitally on the sustainable use of water resources. Access to sufficient quantities of water remains a major limiting factor in Tunisian agriculture. 1 Government policies of the last 3 decades have promoted irrigated cropping patterns at the expense of dryland farming. The consequence has been an increase in water use in the agricultural sector from both renewable and nonrenewable sources. At the same time, economic expansion in the other major sectors of the Tunisian economy (industry and tourism) has increased competing water demand outside the ag