Technology Adoption for Long-Term Drought Resilience

Abstract

In this paper, a mathematical model of optimal management of prolonged and consecutive drought events is developed to evaluate circumstances under which the adoption of a water-efficient technology may offer long-term drought resilience. The decision over technology adoption and its timing is affected by the objective of surviving a certain number of consecutive droughts besides being influenced by the costs of technology and the farmer’s endowments. A key finding is that planning for surviving through a longer drought period may discourage early technology adoption among poorer farmers faced with groundwater scarcity. Compared with wealthy farmers, the tendency to conserve groundwater for the poorer farmers when the drought planning horizon is longer gets reversed with an increase in the risks of repeated droughts. At low risks, groundwater conservation increases with the drought-planning horizon, but at higher risks, groundwater is depleted faster as the drought-planning horizon increases. Technology adoption may be discouraged when the possibility of repeated droughts is imminent or when the risk of an irreversible loss of groundwater is present.