Technology Adoption against Invasive Species

Copyright 2006 by Ram Ranjan. All Rights Reserved. Readers may make verbatim copies of this paper for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. Abstract This paper explores the issue of technology adoption in agriculture that is specifically targeted against invasive species. The analysis involves predicting the long term distribution of technology choices when technology can be adopted and dis-adopted based upon current and expected agricultural profits which are influenced by the state of pest infestation. The impact of adaptive learning on adoption of technology is analyzed in the setting of complacency set in from a reduction in risks or compulsion to adopt technology from reduced profitability in event of non-adoption. Possibility of eradication of the disease based upon long term adoption of technology is also explored. The theoretical analysis confirms the intuition that psychological factors such as complacency may have a significant impact on technology adoption and hence disease eradication. Further, learning from neighbors may not necessarily lead to higher technology adoption. In fact, overall adoption may go down based upon the level of complacency prevalent in masses. An empirical application is performed for the case of soybean rust. Findings indicate that the role of psychological perceptions may play a role in disease spread in the short run. The long term spread and establishment of the disease would be determined by nature and speed of the learning process for the farmer over the pest's optimal management strategy.