Agent Heterogeneity in Adoption of Anaerobic Digestion Technology: Integrating Economic, Diffusion, and Behavioral Innovation Theories

Clark P. Bishop, C. Richard Shumway and Philip R. Wandschneider

Abstract

Anaerobic digestion technology addresses environmental issues of waste disposal and greenhouse gas emission reduction. This paper examines attitudes toward adoption of this conservation technology on dairy farms. To specify an appropriate dependent variable without a large number of adopters, an ordered probit model is constructed. The empirical analysis uses data from a 2006 survey of Pacific Northwest dairy farms. Aggregate variables are constructed based on behavioral economics and conservation adoption literature. Variables include private and social costs, social motives, capacity, innovation receptivity, and opportunity costs, most of which are found to be highly related to the decision to seriously consider adoption. (JEL Q53, Q55)