This paper clarifies the factors determining the welfare effects of improved agricultural technologies when technology diffusion is unevenly distributed across production environments. Household-level income effects are shown to depend primarily on: (a) whether the economy is open or closed with respect to world markets; (b) whether households are net consumers or net producers of the commodity for which technological change occurs; (c) whether households are adopters or non-adopters of the new technology; (d) the degree to which labor is mobile across agricultural regions; and (e) government intervention in commodity andjor factor markets. A review of recent empirical work indicates considerable variation in the relative strength of these various factors across countries, and that assumptions regarding the mechanism by which commodity prices are determined - endogenously as in a closed economy, or exogenously as in an open economy - is especially critical.