The Diffusion of Tractors on the Canadian Prairies: The Threshold Model and the Problem of Uncertainty

Author: Lew B.

Source: Explorations in Economic History, Volume 37, Number 2, April 2000 , pp. 189-216(28)

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Abstract:

The diffusion of tractors during the late 1920s proceeded more slowly than predicted by the threshold model. This lag is reinterpreted as a failure of the threshold model to incorporate farmers' expectations of future prices. Volatility in wheat prices and falling tractor prices are shown to make delaying a tractor purchase a rational decision for wheat farmers in Saskatchewan in the late 1920s. The pattern of diffusion is better explained by a threshold model modified to include uncertainty. Copyright 2000 Academic Press.

Language: English

Document Type: Research article

Affiliations: Department of Economics, Trent University, Peterborough, Ontario, Canada

Publication date: 2000-04-01