Editing Sub-Saharan Africa (section)

==== Uncertainty about quality of agricultural inputs ====

Recent studies explain that farmers mistrust the quality of fertilisers and seeds sold in the formal market.<ref name="Lemon technologies and adoption: Me"/> The study realized in Uganda<ref name="Lemon technologies and adoption: Me"/> infers quality across fertilizer and hybrid seeds varies significantly due to adulteration: sellers tend to mix the fertilizer with poor soil. However, one study realized in Tanzania<ref>{{cite journal   |title=Misperceived quality: Fertilizer in Tanzania. |journal=Journal of Development Economics |date=2021 |volume=148|doi=10.1016/j.jdeveco.2020.102579 |url=https://figshare.com/articles/journal_contribution/23478044 |last1=Michelson |first1=Hope |last2=Fairbairn |first2=Anna |last3=Ellison |first3=Brenna |last4=Maertens |first4=Annemie |last5=Manyong |first5=Victor }}</ref> finds no adulteration in agricultural inputs, but do find that visual appearance of input sold in the formal market is degraded. Whether one study or the other is correct, both papers highlight uncertainty about fertilizer's quality, thus generating mistrust among farmers and consequently generates a low take-up rate.

Another factor highlighting uncertainty about quality is the presence of relatively homogenous pricing among different quality of the same inputs.<ref>{{cite journal  |title=Misperceived quality: Fertilizer in Tanzania. |journal=Journal of Development Economics |date=2021 |volume=148|doi=10.1016/j.jdeveco.2020.102579 |url=https://figshare.com/articles/journal_contribution/23478044 |last1=Michelson |first1=Hope |last2=Fairbairn |first2=Anna |last3=Ellison |first3=Brenna |last4=Maertens |first4=Annemie |last5=Manyong |first5=Victor }}</ref> While in most markets price is a good indicator of quality.<ref>{{cite journal  |title=Price as an indicator of quality: Report on an enquiry |journal=Economica |series=New Series |date=1966 |volume=33 |issue=129 |jstor=2552272 |url=https://www.jstor.org/stable/2552272 |last1=Gabor |first1=André |last2=Granger |first2=C. W. J. |pages=43–70 |doi=10.2307/2552272 }}</ref> the higher the quality, the higher the price- , in this case, uniform pricing prevents farmers from using price as a signal of input quality. Consequently, the inability of farmers to infer the quality, either through physical appearance or price, creates [[Information asymmetry|asymmetric information]] in the market, leading an inefficient market.<ref name="Lemon technologies and adoption: Me"/>

Some papers have tried to understand why sellers do not simply charge higher prices when they offer high-quality seeds and fertilizers,<ref name="Lemon technologies and adoption: Me"/> using a [[Bayesian inference|Bayesian learning model]].<ref>{{cite journal |last1=Jovanovic |first1=B. |last2=Nyarko |first2=Y. |title=A Bayesian learning model fitted to a variety of empirical learning curves |journal=Brookings Papers on Economic Activity: Microeconomics |date=1995 |pages=247–305 |doi=10.2307/2534775 |jstor=2534775|url=https://www.brookings.edu/wp-content/uploads/1995/01/1995_bpeamicro_jovanovic.pdf }}</ref> It is challenging for a company to sell high-quality inputs at a [[Premium pricing|premium price]] and build a reputation in the long term, meaning that farmers will trust the seller regarding the quality of its products. Indeed, as farmers are highly suspicious -due to fear of being scammed- their [[willingness to pay]] for high-quality products is very low. So even if the firm sells high-quality products, it will take too long for farmers to start trusting the firm, and for the seller to become profitable.<ref name="Estimating seed demand in the prese">{{cite journal |title=Estimating seed demand in the presence of market frictions: Evidence from an auction experiment in Nigeria. |journal=Journal of Development Economics |date=2024 |volume=167 |page=103242|doi=10.1016/j.jdeveco.2023.103242 |last1=Wossen |first1=Tesfamicheal |last2=Spielman |first2=David J. |last3=Alene |first3=Arega D. |last4=Abdoulaye |first4=Tahirou |pmid=38434593 |pmc=10831485 }}</ref>