Consumption Risk, Technology Adoption, and Poverty Traps : Evidence from Ethiopia

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dc.creatorDercon, Stefan
dc.creatorChristiaensen, Luc
dc.date2012-06-07T17:28:57Z
dc.date2012-06-07T17:28:57Z
dc.date2007-06
dc.date.accessioned2026-07-01T01:07:10Z
dc.descriptionMuch has been written on the determinants of input and technology adoption in agriculture, with issues such as input availability, knowledge and education, risk preferences, profitability, and credit constraints receiving much attention. This paper focuses on a factor that has been less well documented-the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests. Building on an explicit model, this is explored in panel data for Ethiopia. Historical rainfall distributions are used to identify the counterfactual consumption risk. Controlling for unobserved household and time-varying village characteristics, it emerges that not just ex-ante credit constraints, but also the possibly low consumption outcomes when harvests fail, discourage the application of fertilizer. The lack of insurance causes inefficiency in production choices.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttp://documents.worldbank.org/curated/en/2007/06/7726736/consumption-risk-technology-adoption-poverty-traps-evidence-ethiopia
dc.identifierhttps://hdl.handle.net/10986/7417
dc.identifierhttps://doi.org/10.1596/1813-9450-4257
dc.identifier.urihttp://hdl.handle.net/123456789/415359
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper; No. 4257
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo/
dc.rightsWorld Bank
dc.subjectAGENTS
dc.subjectAGRICULTURE
dc.subjectASSETS
dc.subjectBORROWING
dc.subjectBUDGET CONSTRAINT
dc.subjectBUDGET CONSTRAINTS
dc.subjectCONSUMER PRICE INDEX
dc.subjectCONSUMPTION DECISIONS
dc.subjectCONSUMPTION MODEL
dc.subjectCONSUMPTION PATH
dc.subjectCOST OF CREDIT
dc.subjectCREDIT CONSTRAINT
dc.subjectCREDIT MARKET
dc.subjectCREDIT MARKET IMPERFECTIONS
dc.subjectCREDIT MARKETS
dc.subjectCURRENT CONSUMPTION
dc.subjectDATA SET
dc.subjectDECISION MAKING
dc.subjectDECREASING RATE
dc.subjectDEVELOPING COUNTRIES
dc.subjectDIFFERENTIAL IMPACT
dc.subjectDISTRIBUTION DATA
dc.subjectECONOMIES OF SCALE
dc.subjectEMPIRICAL ANALYSIS
dc.subjectEMPIRICAL EVIDENCE
dc.subjectEMPIRICAL MODEL
dc.subjectEMPIRICAL RESULTS
dc.subjectENDOGENOUS VARIABLE
dc.subjectEXPECTED RETURNS
dc.subjectEXPECTED VALUE
dc.subjectEXPECTED VALUES
dc.subjectFIXED COSTS
dc.subjectFIXED INPUTS
dc.subjectHISTORICAL DATA
dc.subjectHOUSEHOLD CHARACTERISTICS
dc.subjectHOUSEHOLD COMPOSITION
dc.subjectHOUSEHOLD SURVEY
dc.subjectHOUSEHOLDS
dc.subjectIMPERFECT CREDIT
dc.subjectINCOME
dc.subjectINCOME PROCESS
dc.subjectINCOME SHOCKS
dc.subjectINCREASING FUNCTION
dc.subjectINEFFICIENCY
dc.subjectINFLATION
dc.subjectINFORMAL INSURANCE
dc.subjectINSURANCE
dc.subjectINSURANCE MARKETS
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINTERTEMPORAL CONSUMPTION
dc.subjectLABOR MARKET
dc.subjectLEVELS OF CONSUMPTION
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY CONSTRAINT
dc.subjectLIQUIDITY CONSTRAINTS
dc.subjectLOW INFLATION
dc.subjectMARGINAL PRODUCTIVITY
dc.subjectMARGINAL UTILITY
dc.subjectMARGINAL UTILITY OF CONSUMPTION
dc.subjectMARGINAL VALUE
dc.subjectNATURAL LOGARITHM
dc.subjectNEGATIVE SHOCKS
dc.subjectOPTIMIZATION
dc.subjectPERMANENT INCOME
dc.subjectPOLICY RESEARCH
dc.subjectPORTFOLIOS
dc.subjectPRICE CHANGES
dc.subjectPRICE FIXING
dc.subjectPRICE RISK
dc.subjectPRODUCT MARKETS
dc.subjectPRODUCTION FUNCTION
dc.subjectPROFITABILITY
dc.subjectPURCHASE PRICE
dc.subjectRATIONAL EXPECTATIONS
dc.subjectRISK AVERSE
dc.subjectRISK AVERSION
dc.subjectRISK TAKING
dc.subjectSAVINGS
dc.subjectSIGNIFICANT IMPACT
dc.subjectSUNK COSTS
dc.subjectTRANSACTIONS COSTS
dc.subjectUTILITY FUNCTION
dc.subjectWEALTH
dc.titleConsumption Risk, Technology Adoption, and Poverty Traps : Evidence from Ethiopia

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