Presented by David J. Spielman and Patrick Ward, IFPRI at the Africa RISING–CSISA Joint Monitoring and Evaluation Meeting, Addis Ababa, Ethiopia, 11-13 November 2013

1. Economic policy analysis tools for
sustainable intensification
David J. Spielman and Patrick Ward
Africa RISING–CSISA Joint Monitoring and Evaluation Meeting,
Addis Ababa, Ethiopia, 11-13 November 2013

2. CSISA’s policy research agenda
Improved policies & institutions for inclusive growth
Aims and objectives
– Address the policy environment needed to remove constraints
to the adoption of new technologies
– Enhance the productivity and income benefits of improved
agricultural sector growth
– Explore strategies and solutions to catalyse durable change at
scale
Expected outcomes
• Improved policies and incentives that…
– encourage private investment and public-private partnerships in
pro-poor technology development and delivery
– address changing labor, gender, assets, and migration dynamics
related to pro-poor technology development and delivery

3. CSISA’s interesting questions
• What are farmers willing to pay for new technologies?
– Custom-hired resource-conserving machinery services
– Abiotic stress-resistant traits in inbred vs. hybrid backgrounds
• How heterogeneous in this demand for technology?
– Does demand differ across geography, wealth, income, social status, etc.
– Does heterogeneity create market opportunities for private investment?
• How might public and private investment leverage
demand heterogeneity to increase adoption?
– What types of encouragements (subsidy vouchers, discount coupons)
encourage adoption?
– How do social network effects encourage adoption?
– What are the tradeoffs inherent in different encouragement schemes?

4. CSISA’s policy analysis toolkit
• Tools to elicit willingness to pay and risk preferences
– Choice experiments
– Experimental games
• Tools to evaluate impact of a new technology
–
–
–
Natural experiments (difference-in-difference)
Propensity score matching (PSM), Regression discontinuity designs
(RDD), Instrumental variables (IV)
Controlled experiments (RCTs)
• Tools to evaluate market opportunity
– Industry analysis, new empirical industrial organization
– Structure, conduct, performance analysis

5. Ex: Preferences for drought tolerance in rice
• What are farmers willing to pay for drought-tolerant
rice in inbred v hybrid background?
– Inbreds: low-cost “renewable” public sector technology
– Hybrids: high cost “non-renewable” private sector technology
• Participants presented with a series of “choice tasks”
meant to reflect real-world seed purchasing decisions
• Three varying alternatives (A, B, or C): comprised of different
combinations of relevant attributes
• Status quo (D): option to use seed cultivated in previous kharif
season
Source: Ward, Ortega, Spielman and Singh (2013)

6. Illustrated choice tasks
Source: Ward, Ortega, Spielman and Singh (2013)

7. Estimated willingness to pay
Seed must be purchased every year
Attribute
Low seeding rate (4-6 kg/acre)
Duration: 120-135 days
Duration: <120 days
Yield: 1/3/0.6/0.4
t/acre under
normal, severe,
extreme drought
Yield 1/3/0.7/0.4
Yield: 1.3/0.8/0.4
Yield: 1.3/0.9/0.4
-100
-50
0
50
100
150
200
Indian Rupees (INR)
Source: Ward, Ortega, Spielman and Singh (2013)

8. Demand for DT inbred vs DT hybrid rice
Source: Ward, Ortega, Spielman and Singh (2013)

9. Ex: Willingness to pay for LLL
• What are farmers willing to pay for custom-hired LLL
services?
– Binding auction for LLL service at for up to 3 plots of land
– If participant bid ≥ a randomly drawn price, he may receive the service
– Auction repeated in 2011 and 2012
Source: Lybbert, Magnan, Spielman, Bhargava, and Gulati (2013)

10. Heterogeneous willingness to pay across
multiple dimensions
Source: Lybbert, Magnan, Spielman, Bhargava, and Gulati (2013)

11. Change in willingness to pay, 2011-2012
Source: Lybbert, Magnan, Spielman, Bhargava, and Gulati (2013)

12. Cost-effectiveness of targeting strategies
(Subsidy cost per acre and farmer)
350
Subsidy cost per acre leveled
(Rs./acre)
District
BPL
300
Uniform
Landholdings
250
Perfect
200
Net gain for provider
Net loss for provider
First-hour
discount
150
100
100
150
200
250
300
Subsidy cost per farmer leveling (Rs./farmer)
350
Source: Lybbert, Magnan, Spielman, Bhargava, and Gulati (2013)

13. From auction to lottery: social network effects
Auction losers
Random sample from
village v
Auction
Auction winners
(self-selection)
Lottery
(random selection)
Lottery winners
Lottery losers
Outcome:
Water savings ≈ 21%
Source: Magnan, Spielman, Lybbert, and Gulati (2013)

14. New evidence, actionable information
• We can design novel targeting strategies to promote
new technologies
– A private sector strategy: Firms promote technologies to
profitable market segments only
– A public sector strategy: State promotes technologies to all
market segments
– A synthesis strategy: Firms and state collaborate to target
beyond profitable segments only
• Each targeting strategy involves tradeoffs
– Equity vs. efficiency
– Productivity vs. sustainability

15. Thank you