An economic model for adoption of resource conserving technologies

This manuscript presents an economic model for the adoption of resource conserving technologies by farmers. It discusses the theoretical model development relevant for studying technology adoption decisions based on established economic theories. The economic models demonstrate that farmers will select conserving technology without policy intervention; however the social optimum level of conservation will not be achieved. Therefore, government policy in the form of incentives will achieve the social optimal level of conservation. The Random Utility Model is able to explain the discrimination capability of the farmer to choose the alternative with the highest utility. Since the farmer is expected to make a binary decision as dependent variables, estimation of the Logit Model is appropriate. Thus, a complete empirical specification of the model introduces an array of economic, social, institutional, and other relevant factors in econometrically determining the parameters that provide information on the characteristics of technology adoption.