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Simultaneous Estimation Of Technology Adoption And Land Allocation

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  • Moreno, Georgina
  • Sunding, David L.

Abstract

The paper considers the econometric modeling of technology adoption when crop choice is simultaneous. Bivariate probit is used to estimate a model of irrigation technology choice and land allocation using a unique field-level data set from California's Central Valley. Special attention is paid to the proper calculation of marginal effects in the bivariate probit model, which are often useful for policy purposes. Estimation results confirm that the choices of irrigation technology and land allocation are simultaneous. With regard to the influence of price incentives on agricultural water use, estimation results from the bivariate probit model indicate that the influence of water price on the adoption of precision irrigation technology is much larger than previously realized. A univariate model of technology choice that treats land allocation as exogenous underestimates the effect of water price on the adoption of precision technology by over 40 percent.

Suggested Citation

  • Moreno, Georgina & Sunding, David L., 2003. "Simultaneous Estimation Of Technology Adoption And Land Allocation," 2003 Annual meeting, July 27-30, Montreal, Canada 22134, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:22134
    DOI: 10.22004/ag.econ.22134
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    References listed on IDEAS

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    7. Green, Gareth P. & Sunding, David L., 1997. "Land Allocation, Soil Quality, And The Demand For Irrigation Technology," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(2), pages 1-9, December.
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    9. Moore, Michael R. & Negri, Donald H., 1992. "A Multicrop Production Model Of Irrigated Agriculture, Applied To Water Allocation Policy Of The Bureau Of Reclamation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(01), pages 1-15, July.
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    Cited by:

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    2. Boris Bravo & Horacio Cocchi & Daniel Solís, 2006. "Adoption of Soil Conservation Technologies in El Salvador: A cross-Section and Over-Time Analysis," OVE Working Papers 1806, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
    3. Goshu, Degye & Kassa, Belay & Ketema, Mengistu, 2023. "Is food security enhanced by agricultural technologies in rural Ethiopia?," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 18(01), April.
    4. Moreno, Georgina, 2005. "Intrafirm Effects on Water Conservation in Agriculture," 2005 Annual meeting, July 24-27, Providence, RI 19166, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Cocchi, Horacio & Bravo-Ureta, Boris E. & Quiroga, Ricardo E., 2004. "Farm Benefits And Natural Resource Projects In Honduras And El Salvador," 2004 Annual meeting, August 1-4, Denver, CO 20328, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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