Technological innovations, downside risk, and the modernization of agriculture
Kyle Emerick,Alain de Janvry, Elisabeth Sadoulet and Manzoor H. Dar
October 6, 2015
Abstract
We use a randomized experiment in India to show that improved technology enhances agricultural productivity by crowding in modern inputs and cultivation practices. Speci cally, we show that a new rice variety that reduces downside risk by
providing flood tolerance has positive e ects on adoption of a more labor intensive
planting method, area cultivated, fertilizer usage, and credit demand. We nd that a
large share of the expected gains from new technology comes from crowding in of other investments. Therefore, improved technologies that reduce risk by protecting production in bad years have the potential to increase agricultural productivity in normal years.
JEL codes: O30
