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Adoption of Interrelated Agricultural Innovations: Complementarity and the Impacts of Risk, Scale, and Credit
Author(s) -
Feder Gershon
Publication year - 1982
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1241177
Subject(s) - complementarity (molecular biology) , complement (music) , agriculture , economics , industrial organization , returns to scale , scale (ratio) , constraint (computer aided design) , microeconomics , business , production (economics) , engineering , ecology , biochemistry , chemistry , genetics , physics , quantum mechanics , biology , gene , phenotype , mechanical engineering , complementation
The paper presents a model of farm decisions which arise when a farm is faced with two interrelated innovations. The innovations are distinguished by their returns to scale, and may be adopted individually. It is shown that under conditions of uncertainty or a binding credit constraint, the intuitive concept of innovations' complementarity may be misleading, and a more relevant definition of complementarity is derived. The latter helps to explain why policies which enhance adoption of one innovation may discourage adoption of the other, even when the two innovations seem to complement each other.