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3ie-LIDC seminar: The Value of Advice: Evidence from the Adoption of Agricultural Practices

Monday, March 14, 2016 - 17:00 to 18:30
Venue: 
LIDC Building, 36 Gordon Square London WC1H 0PD, Upper Meeting Room
Speaker: 
Shawn A. Cole, Harvard Business School

Attempts to explain dramatic differences in agricultural productivity around the world typically focus on farm size, risk aversion, and credit constraints, with an emphasis on how they might serve to limit technology adoption. This paper takes a different tack: can managerial practices explain this variation in productivity? A randomized evaluation of the introduction of a mobile phone-based agricultural consulting service, Avaaj Otalo (AO), to farmers in Gujarat, India, reveals the following. Demand for agricultural advice is substantial and farmers offered the service turn less often to traditional sources of agricultural advice. Management practices change as well: farmers invest more in recommended agricultural inputs, resulting in dramatic increases in average yield for cumin (26.3%), as well as improvements in cotton yield (3.5%) for a sub-group that received frequent reminders to use the service. Our design allows us to estimate peer effects, and we find treated farmers with more treated peers are more likely to change behavior; and evidence that non-study farmers whose peers were treated also change cropping decisions. Farmers appear willing to follow advice without understanding why it is correct: we do not observe gains in agricultural knowledge. We estimate that each dollar spent on providing the service yields a return of $10. These findings highlight the importance of managerial practices in facilitating technology adoption in agriculture.

Speaker: Shawn A. Cole

Shawn Cole is a professor in the Finance Unit at Harvard Business School, where he teaches and conducts research on financial services and social enterprise.

Much of his research examines corporate and household finance in emerging markets, with a focus on insurance, credit, and savings. He has also done extensive work on financial education in the US and emerging markets. His recent research focuses on designing and delivering advice and education over mobile phones, with an emphasis on agricultural and financial management.

He has worked in China, India, Indonesia, South Africa, and Vietnam. He is an affiliate of the National Bureau of Economic Research, and the Bureau for Research and Economic Analysis of Development. He is on the board of the Jameel Poverty Action Lab, as the co-chair for research.

Before joining the Harvard Business School, Professor Cole worked at the Federal Reserve Bank of New York in the economic research department. He has served on the Boston Federal Reserve's Community Development Research Advisory Council, serves as an external advisor to the Gates Foundation, and was the chair of the endowment management committee of the Telluride Association, a non-profit educational organization.

He received a Ph.D. in economics from the Massachusetts Institute of Technology in 2005, where he was an NSF and Javits Fellow, and an A.B. in Economics and German Literature from Cornell University. His work on insurance earned the 2015 "Shin Research Excellence Award;" in 2015 he was also named given a “Faculty Pioneer Award” from the Aspen Institute.

Registration:

Free and open to all. First come first serve basis. 

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