A test for complementarities among multiple technologies that avoids the curse of dimensionality

We propose a strategy to identify the complementarity or substitutability among technology bundles. Differences between the observed distribution of technology choices can be subjected to statistical tests. Combinations of technologies that occur with greater frequency than would occur under independence are complementary technologies. Combinations that occur with less frequency are substitute technologies. We use the strategy to evaluate multiple technology adoptions on US hog farms. As the number of bundled technologies increases, they are increasingly likely to be complementary with one another, even if subsets are substitutes when viewed in isolation.

► We propose to identify the complementarity among multiple technology bundles. ► Complementary technology combinations occur more often than under independence. ► We use the strategy to evaluate multiple technology adoptions on US hog farms. ► Complementarity increases with the number of bundled technologies.