Date of Award

8-2016

Degree Type

Thesis

Degree Name

Master of Science (MS)

Department

Agricultural Economics

First Advisor

Juan P. Sesmero

Committee Chair

Juan P. Sesmero

Committee Member 1

Benjamin M. Gramig

Committee Member 2

Gerald E. Shively

Abstract

This study examines the economic viability of flexible irrigation pumps that can run on biogas as well as diesel fuel in Bangladesh. Such examination faces two main hurdles. First, the ease with which farmers running flexible pumps can switch from one energy source to another is unknown and perhaps highly heterogeneous. Second, diesel prices in Bangladesh are volatile and limited information precludes direct estimation of their probability distribution. We address the first issue by evaluating the economics of flexible pumps for varying degrees of inter-fuel substitutability. To deal with the second issue, we model the probability distribution of Bangladeshi diesel prices conditional on prices in India (these markets are integrated) plus a directly estimated distribution of the error-in-prediction. Our analysis identifies conditions (patterns in diesel markets, inter-fuel substitutability, and policy) that would render flexible pumps economically attractive. Results show that flexible pumps can generate large benefits for Bangladeshi farmers.

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