Essays on the Microeconomics of Technology Adoption with Application to Ethiopian Agriculture

The dissertation explores the role of land reforms and agricultural extension in promoting technology adoption in the Ethiopian agricultural sector. The first two essays of the dissertation are devoted to examining the role of property rights institutions in promoting technology adoption. In the second chapter, we provide a theoretical framework which shows that an important mechanism through which improved property rights influences technology adoption is by altering the optimal contractual arrangements economic agents choose, but the magnitude of this impact depends partly on the degree of credit market imperfections prevailing in the economy. We analyze this in the agricultural sector in a developing country setting and develop a model which predicts that by reducing both tenure insecurity and transaction costs, credible land title reforms provide incentives for farmers to move towards contracts that encourage the adoption of chemical fertilizers.;In the third chapter, we estimate the impact of improved land rights on farmers' choice of land and labor contracts and technology adoption using panel data from Ethiopia, which introduced legislation that gave farmers perpetual land use rights aimed at improving their tenure security. The empirical approach allows us to empirically disentangle the direct impact of improved tenure security on technology adoption, by reducing the risk of expropriation, from its indirect impact through its effect on the optimal choice of land and labor contracts. The econometric results demonstrate improved property rights in Ethiopia have their greatest effect on the adoption of chemical fertilizers by transforming the agrarian contractual structure.;The fourth chapter evaluates the impact of the Ethiopian agricultural extension program in promoting the use of chemical fertilizers among farmers by employing propensity score matching and inverse probability weighting methods. These methods help us arrive at credible estimates of the impact of the Ethiopian agricultural extension program by carefully handling endogeneity problems that have bedeviled prior research aimed at estimating the impact of extension programs on technology adoption and overall farm performance in several developing economies. Our empirical results show that the Ethiopian extension program increases both the likelihood of chemical fertilizer adoption and enhances the intensity of fertilizer use by farmers, but the impact is heterogeneous across households.