Files
Abstract
Achieving agricultural growth and development and thereby improving rural household
welfare will require increased efforts to provide yield enhancing and natural resources
conserving technologies. Agricultural research and technological improvements are therefore
crucial to increase agricultural productivity and thereby reduce poverty. However evaluation of
the impact of these technologies on rural household welfare have been very limited by lack of
appropriate methods and most of previous research has therefore failed to move beyond
estimating economic surplus and return to research investment. This paper evaluates the
potential impact of adoption of modern agricultural technologies on rural household welfare
measured by crop income and consumption expenditure in rural Ethiopia and Tanzania. The
study utilizes cross-sectional farm household level data collected in 2007 from a randomly
selected sample of 1313 households (700 in Ethiopia and 613 in Tanzania). We estimate the
casual impact of technology adoption by utilizing endogenous switching regression and
propensity score matching methods to assess results robustness. This helps us estimate the true
welfare effect of technology adoption by controlling for the role of selection problem on
production and adoption decisions. Our analysis reveals that adoption of improved agricultural
technologies has a significant positive impact on crop income although the impact on
consumption expenditure is mixed. This confirms the potential direct role of technology
adoption on improving rural household welfare, as higher incomes from improved technology
translate into lower income poverty.