Authors
Esther Duflo, Michael Kremer, Jonathan Robinson
Publication date
2011
Journal
American Economic Review
Volume
101
Issue
6
Pages
2350-2390
Description
We model farmers as facing small fixed costs of purchasing fertilizer and assume some are stochastically present biased and not fully sophisticated about this bias. Such farmers may procrastinate, postponing fertilizer purchases until later periods, when they may be too impatient to purchase fertilizer. Consistent with the model, many farmers in Western Kenya fail to take advantage of apparently profitable fertilizer investments, but they do invest in response to small, time-limited discounts on the cost of acquiring fertilizer (free delivery) just after harvest. Calibration suggests that this policy can yield higher welfare than either laissez-faire policies or heavy subsidies. (JEL Q13, Q12, Q16, Q18)
Total citations
2009201020112012201320142015201620172018201920202021202220232024133850818910612613214218014616415516616479