This paper reports the results of a stated preference survey in the highlands of Ethiopia where the farmers are given a choice between an agricultural extension package and a local public - representing two major developing strategies. The study finds that a majority of people prefers the public good.
However, when the extension package is combined with insurance, then we find a significant increase in the choice of the extension package. The study thus sheds light on why Ethiopia's major development strategy has had limited success and gives evidence of how stated preference methodologies can be utilized for development policy design.
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