Determinants in the adoption of a non-labor-substitution technology: mechanical ventilation in West Virginia coal mines, 1898–1907

Abstract

Accounts of technological change during industrialization processes based on labor-saving innovations are commonplace, even more so in the coal mining industry, in which the focus has until now been placed on the steam engine water pump and the coal cutting machine. However, to better understand technological change, we need to bear in mind the study of complementary capital. While previous research on complementary capital relies on evidence for manufacturing or the aggregate economy, this paper focuses on a case study, which provides more details on technology adoption decisions. This paper considers mechanical ventilation, a prominent and largely overlooked technology complementary to labor, as a response to stale air and explosions in the exploitation of coal. We examine the determinants in the adoption of the newer technology—the mechanical ventilator—through an economic model that is established at a high level of disaggregation: the mine. We concentrate on the West Virginia coalfield at the turn of the twentieth century, an apt historical setting for the study of technology adoption. We quantify characteristics of mines over time, so we are able to estimate a panel. We show the importance of various costs and benefits in explaining which type of mine converted from older technologies to the newer technology. The model is complemented with qualitative information, which helps to explain why an older technology slowed the process of adopting the newer as a result of different costs associated with the substitution.