Bednets, Information and Malaria in Orissa

This paper studies the identification and estimation of a basic model of technology adoption using specifcally collected information on subjective beliefs and expectations to identify key model parameters. We discuss identifcation with both non-parametrically and parametrically specified utility as well as parametric and semi-parametric specifcations for unobserved heterogeneity. We propose parametric and semi-parametric estimation methods to recover underlying preferences and use the model to study the adoption of Insecticide Treated Nets (ITNs) among poor households in rural India. We carry out counterfactual exercises to examine the effects of price and belief changes on net ownership decisions. The results suggest that purchase decisions are relatively insensitive to changes from current prices and beliefs. The method proposed here should have applicability to other discrete choice settings with non-linear indices.