Agroforestry Adoption By Smallholders

Abstract

In this chapter, we develop a model of the adoption decision process using microeconomic theory and illustrate its econometric application with two case studies in the Philippines and Mexico. These case studies examine different types of agroforestry systems in sites that contrast ecologically, socially, and culturally. In this chapter, we develop a theoretical model of agroforestry adoption based on neoclassical economics, household production theory, and a review of the literature of empirical studies of adoption of agricultural and agroforestry innovations. The literature review reveals five general categories of factors shown to influence agroforestry adoption: market incentives, biophysical conditions, risk and uncertainty, household preferences, and resource endowment. We test these factors with two empirical case studies. The literature review and our case studies also reveal several concerns with the recent studies on agroforestry adoption behavior. First, the majority of empirical studies examine agroforestry adoption as a snapshot in time. Second, the majority of adoption studies are limited in scope geographically as well as temporally. Third, returning to a point made by Feder et al. (1985), if the technology is nondivisible, it takes on a dichotomous form at the individual level and a continuous form at the aggregate. Fourth, the majority of recent studies (including our two case studies) apply standard logit or probit methods to the binary adoption data. Yet, a variety of alternative econometric techniques are available that apply different estimation approaches (such as linear probability, generalized method of moments) and/or make fewer assumptions about the distribution of the error term or about the estimation process (such as semi- and nonparametric approaches). Finally, recent studies have explored the usefulness of stated preference methods such as conjoint analysis to examine how and why farmers choose different types of agroforestry systems.