Risk Attitudes, Social Interactions and the Adoption of Genotyping in Dairy Production

Abstract

Risk attitudes and social interactions have been of increasing interest to economists in the understanding of new technology adoption. This study examines the impacts of risk attitude and social interaction on the willingness to pay (WTP) for DNA genotyping service for mastitis susceptibility. Since the technology is not available to farmers, contingent valuation with double bounded dichotomous choice questions have been applied to reveal producers’ potential willingness to pay (WTP) for DNA genotyping and assume that the WTP may serve as an indicator of planned adoption decision. The mean WTP for DNA genotyping is estimated around $50. Both risk tolerance and social interactions are found to have positive impact on potential WTP for the technology. Specifically, producers’ risk attitudes towards professional activity and health are shown to have the most significant impact on the WTP. In addition, the results also highlight the interaction effect between risk attitudes and social interactions.