Risk, Schooling and the Choice of Seed Technology in Developing Countries: A Meta-Profit Function Approach.

The determinants of rice seed variety choice are studied in a framework in which cultivator's variety-specific profit, risk preferences, uncertainty, and schooling affect variety choice. The econometric model takes the form of a simultaneous equation switching regimes model with random profit functions (the metaprofit functions). Adoption of high-yielding varieties in Indonesia is found to be positively associated with profitability, likelihood of flooding, quality of irrigation conditional on relative profit, and availability of credit, and negatively associated with likelihood of drought and land wealth. Schooling significantly affects variety-specific profit and input demand, but not variety choice. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.