Abstract

In this paper adoption of dairy technologies in the Ethiopian highlands was examine using seemingly unrelated multivariate probit model which encompasses the effects of interdependencies of multiple technologies and unobserved heterogeneity in a unified framework. Model estimates show that household's likelihood of adopting dairy technologies is jointly determined by the observed household characteristics as well as unobserved household level and contextual factors. Empirical results show strong evidence of interdependencies in adoption decisions of dairy technologies, largely accounted by omitted variables. Among explanatory variables, while household income is positively associated with adoption of crossbred dairy cows, the size of livestock holdings is negatively associated with adoption of crossbred dairy cows. Overall, the results of this study suggest that the challenge to foster large scale uptake of technologies and productivity growth in the dairy sector goes beyond addressing household-level factors and requires a better understanding of unobserved heterogeneity among farmers and contextual factors.

Key words: Dairy, technology adoption, seemingly unrelated multivariate probit, heterogeneity.