Distributional Impact of Agricultural Technology Adoption on Rice Farmers' Expenditure: The Case of Nerica in Benin

Abstract

AbstractIn this paper, we assess the impact of Nerica, a family of high-yielding hybrid rice varieties, on welfare in Benin. Our empirical analysis utilizes instrumental variable and quantile treatment effects methods to estimate the impacts of cultivating Nerica on welfare along the income distribution. We find that Nerica adoption increases households' expenditure across the entire distribution of income. The quantile treatment effects are statistically different from the average treatment effects, suggesting substantial heterogeneity in the impacts of the adoption of Nerica on welfare. We also find that, in absolute terms, the impact for farmers located in the upper half of the income distribution is the largest. However, farmers at the bottom of the income distribution also experienced large proportional increase in welfare. Altogether, our results suggest that the adoption of improved rice seeds reduces poverty and has the potential to contribute to the reduction of income inequality among farmers.