Partial Adoption of Divisible Technologies in Agriculture

We have developed a dynamic theoretical model to investigate technology complements where the degree of adoption is a function of producers' prior technology levels. Based on this model, we used an empirical application to assess the adoption of integrated pest management (IPM) with and without irrigation. Results indicate that the degree of new technology adoption may depend on the extent of the risk. For example, strongly risk-averse producers who use dryland technology may only partially adopt IPM. And producers who irrigate to significantly decrease variation in yield and returns may also only partially adopt IPM.