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Trouble with Zero: The Limits of Subsidizing Technology Adoption
Last registered on November 02, 2020
View Trial History

Pre-Trial

Trial Information
General Information
Title
Trouble with Zero: The Limits of Subsidizing Technology Adoption
RCT ID
AEARCTR-0006661
Initial registration date
November 02, 2020
Last updated
November 02, 2020 8:45 AM EST
Location(s)
Country
India
Region
Bihar
Primary Investigator
Name
Hemant Pullabhotla
Affiliation
Contact Primary Investigator
Other Primary Investigator(s)
PI Name
Pallavi Shukla
PI Affiliation
Johns Hopkins University
PI Name
Kathy Baylis
PI Affiliation
UC Santa Barbara
Additional Trial Information
Status
Completed
Start date
2015-11-01
End date
2018-12-01
Keywords
Agriculture, Behavior
Additional Keywords
Reference Dependence, Technology Adoption, Agricultural Subsidies, Zero Price
JEL code(s)
D91, O13
Secondary IDs
Abstract
In this project, we use a randomized control trial to test whether paying an initial price of zero (a 100% subsidy) relative to a non-zero, partially subsidized price affects long-run technology adoption among smallholder farmers. Subsidies can encourage short-run adoption, provide farmers with the opportunity to learn from experience, and potentially lead to increased adoption in the long-run. Conversely, long-run adoption may be lower if large initial subsidies result in a lower willingness to pay (WTP) later due to behavioral phenomena such as price reference dependence or price anchoring. The price anchoring effect may be particularly salient if the initial price paid is zero. To test the impact of subsidies on long-run adoption, we randomize farmers' initial prices for improved grain storage technology. One year later, we elicit willingness-to-pay from all farmers for a second round of technology purchases. We also collect data on relevant grain storage outcomes and farmers' experience with the technology to test for differences in the usage and perceived and actual benefits across subsidy levels.
External Link(s)
Registration Citation
Citation
Baylis, Kathy, Hemant Pullabhotla and Pallavi Shukla. 2020. "Trouble with Zero: The Limits of Subsidizing Technology Adoption." AEA RCT Registry. November 02. https://doi.org/10.1257/rct.6661-1.0.
Sponsors & Partners
Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2017-06-01
Intervention End Date
2018-08-01
Primary Outcomes
Primary Outcomes (end points)
Willingness-to-pay
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Technology usage, grain storage, grain sales, grain consumption, grain damage
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Farmers in first group of villages received technology at a randomized subsidy level using a Becker-DeGroot-Marschak (BDM) auction. The second group received the technology through a flat-rate subsidize price. Farmers in the last group received the technology for free. In year two, farmers from all three treatment groups participated in a Becker-DeGroot-Marschak (BDM) auction and willingness-to-pay was elicited.
Experimental Design Details
Randomization Method
Randomization of villages done in office by a computer; price levels in Becker-DeGroot-Marschak (BDM) auction determined by price drawn by participant.
Randomization Unit
Clustered at village level
Was the treatment clustered?
Yes
Experiment Characteristics
Sample size: planned number of clusters
24 villages
Sample size: planned number of observations
1200 farmers
Sample size (or number of clusters) by treatment arms
750 farmers in BDM auction group, 200 in flat-rate group, 250 in zero price group
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Study has received IRB approval. Details not available.
IRB Approval Date
Details not available
IRB Approval Number
Details not available
Analysis Plan
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
Yes
Intervention Completion Date
August 01, 2018, 12:00 AM +00:00
Is data collection complete?
Yes
Data Collection Completion Date
December 01, 2018, 12:00 AM +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
1083 farmers from 24 villages
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
1083 farmers from 24 villages
Final Sample Size (or Number of Clusters) by Treatment Arms
633 farmers in BDM auction group, 200 in flat-rate group, 250 in zero price group
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports, Papers & Other Materials
Relevant Paper(s)
REPORTS & OTHER MATERIALS