Annemie Maertens

Who Cares What Others Think (or Do)? Social Learning and Social Pressures in Cotton Farming in India

Abstract This paper examines the role that social networks play in the adoption process of Bacillus thurigiensis (Bt) cotton, a type of genetically engineered cotton that has been available on the Indian market since 2002. Using a unique dataset and empirical methodology, I find that farmers appeared to have exclusively learned from the experimentation of a small set of “progressive” farmers in the village, that is, adoption by other (“regular”) farmers was not considered a useful source of information about the technology. Second, I find evidence of social pressures, originating from the belief that Bt cotton might be hazardous to the environment and livestock, which inhibited adoption, at least for some time. JEL codes: O3, Q1.

Why farmers sometimes love risks: evidence from India

Using a unique data set collected among farmers in India’s semiarid tropics, we document the surprising prevalence of risk-taking behavior in the face of realistically framed high-stakes gambles. We hypothesize that this apparently anomalous behavior is due to a combination of credit constraints and nonconvexities in production. In particular, the high-stakes nature of the gambles creates the potential for a farmer to undertake a productive investment that would normally be unaffordable and thereby move to a permanently higher level of income. We show that the degree to which farmers are willing to accept risk in return for this opportunity appears to relate in an intuitive way to their current agricultural production technology as well as the demographic composition of their household.

Learning Your Child's Price: Evidence from Data on Projected Dowry in Rural India

This paper introduces a new primary dataset on dowry payments in rural India. A novel feature of the data is that in addition to eliciting actual dowry payments, we also asked rural Indian households how much dowry they expected to pay/receive for each of their currently unmarried children. These expectations are presumably the basis of household decision making (as opposed to actual dowries paid and received) with respect to decisions such as human capital investments, saving and consumption, etc. We find that the distribution of dowry forecasts appears to be consistent with the distribution of actual dowry payments, suggesting that dowry perceptions may be quite accurate. Our analysis of dowry forecasts further indicates that (i) Individual-specific attributes are significantly more important than household income and wealth in terms of explaining the magnitude of dowry payments, and (ii) bride quality is also a significant determinant of dowry, which provides a corrective to the emphasis on groom quality in the literature.