Abstract
To increase adoption of new agricultural technologies, both push (supply side) and pull (demand side) factors are important. As a push factor to increase adoption of a particular technology such as an improved seed variety, some level of initial subsidy is often offered. For instance, companies may offer free trial packs of new improved seed varieties; governments may offer subsidies to increase varietal turnover. However, it is also often argued that if something was subsidized (or even free), it may not be used for the intended purpose. In this paper, we first test the effectiveness of free trial packs by testing if farmers that receive a sample of a new improved seed variety are more likely to adopt it in the future than a control group of farmers who did not get a free sample. Furthermore we test whether farmers learn differently from seed that was obtained for free than if they had to pay a (small) price for it. This questions is investigated using BDM auction—essentially a two stage pricing design—such that we can disentangle the selection effect, whereby farmers that are prepared to pay a price are likely to be more motivated to learn from it for subsequent adoption decisions, and the sunk cost effect, where a product that has a price attached to it is valued more. In addition to the supply side intervention, we also test the relative effectiveness of a demand sided intervention for adoption of new or improved varieties—an area often overlooked in existing research. In particular, we cross-randomize an intervention where households are demonstrated how to prepare the new seed variety and get the ability to taste it.