Why Did Sugarcane Growers Suddenly Adopt Existing Technology?

I investigate the role of regulation and factor prices in the rapid, widespread adoption of mechanical harvesting technology by Brazilian sugarcane growers. I use workerand establishment-level data to test the effect of regulation using complementary regression discontinuity and difference-in-differences approaches. I find that regulation is, at best, a partial explanation, accounting for no more than one quarter of the dramatic change in harvesting practices. I develop a tipping-point model to show how rising wages may have played an important role even though the change in wages was gradual and the change in harvesting was abrupt; instrumental variables estimates imply that increasing wages alone are sufficient to explain the adoption of green technology.