| ID | 124550 |
| Title Proper | Social learning and parameter uncertainty in irreversible investments |
| Other Title Information | evidence from greenhouse adoption in northern China |
| Language | ENG |
| Author | Wang, Honglin ; Yu, Fan ; Reardon, Thomas ; Huang, Jukun and Rozelle, Scott |
| Publication | 2013. |
| Summary / Abstract (Note) | This paper aims at an important gap in the literature, which has not modeled the effect of social learning in a real option context and examined uncertainty-reduction measures through social learning. This paper addresses the gap by modeling social learning as a way of reducing parameter uncertainty, thus facilitating technology adoption and shortening the waiting time in irreversible investments. We use household-level data on intermediate-technology greenhouse adoption in northern China to test the predictions in both a linear probability model and a duration analysis. Our empirical findings support the hypothesis. We also find that market volatility and insecure land property rights discourage adoption. |
| `In' analytical Note | China Economic Review Vol.27, No.4; December 2013: p.104-120 |
| Journal Source | China Economic Review Vol.27, No.4; December 2013: p.104-120 |
| Key Words | Social Learning - China ; Uncertainty Parameter - Economic ; Irreversible Investment - China ; Economics - China ; Micro Economics - China ; Northern China ; Greenhouse Concepts - China ; Reduction Measure |