Productivity and household welfare impact of technology adoption: Micro-level evidence from rural Ethiopia
Tigist Mekonnen Melesse
#2017-007
This study evaluates the potential impact of improved agricultural
technologies on smallholders’ crop productivity and welfare. We use
household-level data from Ethiopian Rural Household Survey collected by
IFPRI in 1989-2009. The survey covers around 1500 rural households drawn
from four regions and 15 rural villages. Endogenous treatment effect
model is employed to account for the selection bias on households’
technology adoption decision. The study employs both single and
multi-level treatment effect approaches which is unique and represents a
departure from previous impact evaluation studies which relied on single
treatment effects. Results of the analysis indicate that there is
positive and significant effect of improved technology adoption on the
rural households’ crop productivity and welfare in Ethiopia. Key factors
for crop productivity and household welfare in the rural farm households
are educational level, farm size, credit access, labor use, an extension
program, expenditure for modern input and asset holding. While large
household size negatively affects the welfare of households. For
improving productivity, food security and welfare of smallholder
farmers, policy priority should be an investment in research and
development on major cereal crops adapted to local agroecological
condition.
JEL Classification: D24, I31, Q18
Keywords: Agricultural intensification, impacts, productivity, welfare,
endogenous treatment effect model