Abstract

In rural areas of LatinAmerican Countries, irrigation requirements for perennial crops, like cocoa are expected to increase. This paper develops a novel holistic approach to model private investment decisions in irrigation adoption by small and mid-sized cocoa farmers that face competing sources of uncertainty. In agricultural studies data collection through surveys often leads to issues of missing information on key measured variables. Our approach deals simultaneously with the issue of endogeneity of considering diverse risk sources and with the missing values in key covariates. The study considers multiple levels of irrigation adoption in a context where traditional and modern irrigation systems might coexist. The main contributions of this paper are both its methodological approach and its empirical application filling a knowledge gap on irrigation adoption.