HYV In India (Foster & Rosenzweig) (Conley & Udry Info Neigbours) (DKR Pilot Farm)

Question 1

Foster and Rosenzweig: HYV seeds general characteristic

Answer 1

Higher yield than traditional seeds when managed correctly e.g inputs such as fertilisers

Question 2

How does profitability of HYV increase? and who does it?

Answer 2

Profitability increases with past experimentation e.g working out best way to combine it with the inputs

Done by either yourself or others (watch others to learn from mistakes)

Question 3

Model:

Answer 3

Farmer invests current expectation of ø*.

After harvesting can find optimal input levels (e.g realises not enough fertiliser) , then update beliefs about ø*. Also use experience of others.

Question 4

The farmer always invests his current expectation of optimal input (θ*) e.g how much fertiliser, pesticides etc he thinks he needs

What is the expression for optimal input? What is input specific too? (3)

Answer 4

θijt = θ* + uijt

Since input is plot (i) , farmer (j) and time specific.
(Because the optimal input amount depends on region and time!)

Question 5

Findings

Answer 5

Marginal profit of the last HYV parcel is optimally negative i.e future externalities from learning by doing!

(Reasoning when marginal return goes from 0 to negative means we now know our optimal input has been exhausted!

Question 6

So that was optimal input.
What does optimal planting depend on

Answer 6

Past and future neighbour planting

(Future as well because if farmer (j) thinks neighbour will plant, they will wait and see results - once again learning externalities!!

Question 7

Effect of higher assets (more plots)

Answer 7

More gains from learning - more experimentation

Question 8

Effect of neighbours assets on own planting (from neighbour’s perspective)

Answer 8

Learning externalities: neighbour benefits more from my planting if he has higher assets (since more plots so can gain bigger returns from the learning)

Question 9

Conley & Udry: pineapples in Ghana

What was their research aim

Answer 9

To see causal effect of successful neighbours on own choices

Question 10

How does this differ from Foster and Rosenweig’s optimal input experiments on HYV

Answer 10

Because F&R assume farmers learn from neighbours inputs and profits

Can be naive since assumes farmers speak to their neighbours.

C&U identifies “information neighbours” who actually communicate together, thus to accurately show the effect of information on their own choices

Question 11

So do they respond to information of information neighbours who were successful in past?

And what is an evaluation to this answer

Answer 11

Yes

Eval: although controlled for things, cannot exclude some factors e.g weather making them change choices, so can’t know for sure that their information neighbours actually attributed to the decision

Question 12

Conley & Udry robustness test

Answer 12

Apply methods to another crop with known technology, and found no effect of successful information neighbours on own practices

(So supports the evaluation point that learning from others may not be as influential as portrayed)

Question 13

Duflo Kremer and Robinson: fertiliser in Kenya

Answer 13

World Bank “fertiliser substantially increases yield”.
Fertiliser use low - ONLY 15% USE!

Fertiliser demonstrations set up on random plots (pilot farmers), and then also invited farmers friends to watch demonstrations. (More non-invited came too!)

Question 14

Findings

Answer 14

No effect on fertiliser adoption for neighbour of the pilot farmer. (So doesn’t look like neighbours learn from their neighbour)

Invited friends were 17% more likely to adopt fertiliser than non-invited friends, however effect diminishes rapidly

Pilot farmers continued to use fertiliser but small effect (only 10.7% more, so 25% since control group 15% used fertiliser!)