The Demand for Advice
Low levels of investment into modern technologies, and limited use of measures that have low monetary cost but the potential for high yields, are often regarded as obstacles to further agricultural development. This paper investigates farmers’ demand for one such measure, namely agricultural advisory services. These have modest (most frequently zero) monetary user cost but, according to some recent research, have the potential to result in large increases of yields. Yet demand for these extension services is often low. We propose that costly attention may be part of the explanation for this. In our model, advisory services are available free of charge, but positive effects on production are only realized if farmers devote attention to listening to and implementing the provided advice. Modeling farmers as rational decision makers facing scarce attention, we identify the circumstances under which farmers may optimally abstain from demanding advisory services. The model complements the insights of other theories commonly used to explain suboptimal farm decisions and outcomes, and generates testable predictions, which are consistent with empirical evidence based on a large farm-level panel dataset from Sub-Saharan Africa.
| Main Authors: | , |
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| Format: | Journal Article biblioteca |
| Language: | English en_US |
| Published: |
Published by Oxford University Press on behalf of the World Bank
2021-02-17
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| Subjects: | ECONOMIC DEVELOPMENT, ADVICE, AGRICULTURAL EXTENSION, RATIONAL INATTENTION, SUB-SAHARAN AFRICA, |
| Online Access: | http://documents.worldbank.org/curated/en/099708012082332500/IDU0ed24a79e0aa9304fc508658009840b0490be https://openknowledge.worldbank.org/handle/10986/40763 |
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| Summary: | Low levels of investment into modern
technologies, and limited use of measures that have low
monetary cost but the potential for high yields, are often
regarded as obstacles to further agricultural development.
This paper investigates farmers’ demand for one such
measure, namely agricultural advisory services. These have
modest (most frequently zero) monetary user cost but,
according to some recent research, have the potential to
result in large increases of yields. Yet demand for these
extension services is often low. We propose that costly
attention may be part of the explanation for this. In our
model, advisory services are available free of charge, but
positive effects on production are only realized if farmers
devote attention to listening to and implementing the
provided advice. Modeling farmers as rational decision
makers facing scarce attention, we identify the
circumstances under which farmers may optimally abstain from
demanding advisory services. The model complements the
insights of other theories commonly used to explain
suboptimal farm decisions and outcomes, and generates
testable predictions, which are consistent with empirical
evidence based on a large farm-level panel dataset from
Sub-Saharan Africa. |
|---|