Expecting too much, foreseeing too little? Behavioral explanations for the sell low-buy high puzzle in smallholder market participation
It is often observed that smallholder farmers sell most of their marketable surplus immediately after the harvest when seasonal price movements reach their lowest point, instead of waiting just a few more months until prices recover. Most explanations for this seemingly sub-optimal behavior focus on...
| Autores principales: | , , , , |
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| Formato: | Informe técnico |
| Lenguaje: | Inglés |
| Publicado: |
International Food Policy Research Institute
2024
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/148993 |
| _version_ | 1855522558654283776 |
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| author | De Weerdt, Joachim Dillon, Brian Hami, Emmanuel Van Campenhout, Bjorn Nabwire, Leocardia |
| author_browse | De Weerdt, Joachim Dillon, Brian Hami, Emmanuel Nabwire, Leocardia Van Campenhout, Bjorn |
| author_facet | De Weerdt, Joachim Dillon, Brian Hami, Emmanuel Van Campenhout, Bjorn Nabwire, Leocardia |
| author_sort | De Weerdt, Joachim |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | It is often observed that smallholder farmers sell most of their marketable surplus immediately after the harvest when seasonal price movements reach their lowest point, instead of waiting just a few more months until prices recover. Most explanations for this seemingly sub-optimal behavior focus on economic or infrastructural issues, such as credit constraints or lack of storage facilities. In this study, we take a closer look at two potential behavioral explanations. One explanation focuses on household expenditure and assumes that households face challenges in accurately predicting future expenditures, systematically underestimating future needs. A second potential explanation focuses on household income, where motivated reasoning leads farmers to sell too early and/or at low prices. To test these hypotheses, we conduct two planning-based interventions among a sample of Malawian smallholder farmers: (1) a detailed expense budget and (2) a sales plan with explicit commitment to timing of sales, quantities and prices. The treatments were administered at harvest time in May 2022 and April 2023. |
| format | Informe técnico |
| id | CGSpace148993 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2024 |
| publishDateRange | 2024 |
| publishDateSort | 2024 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1489932025-11-06T05:57:08Z Expecting too much, foreseeing too little? Behavioral explanations for the sell low-buy high puzzle in smallholder market participation De Weerdt, Joachim Dillon, Brian Hami, Emmanuel Van Campenhout, Bjorn Nabwire, Leocardia household income prices smallholders surpluses It is often observed that smallholder farmers sell most of their marketable surplus immediately after the harvest when seasonal price movements reach their lowest point, instead of waiting just a few more months until prices recover. Most explanations for this seemingly sub-optimal behavior focus on economic or infrastructural issues, such as credit constraints or lack of storage facilities. In this study, we take a closer look at two potential behavioral explanations. One explanation focuses on household expenditure and assumes that households face challenges in accurately predicting future expenditures, systematically underestimating future needs. A second potential explanation focuses on household income, where motivated reasoning leads farmers to sell too early and/or at low prices. To test these hypotheses, we conduct two planning-based interventions among a sample of Malawian smallholder farmers: (1) a detailed expense budget and (2) a sales plan with explicit commitment to timing of sales, quantities and prices. The treatments were administered at harvest time in May 2022 and April 2023. 2024 2024-07-09T15:52:39Z 2024-07-09T15:52:39Z Report https://hdl.handle.net/10568/148993 en Open Access application/pdf International Food Policy Research Institute De Weerdt, Joachim; Dillon, Brian; Hami, Emmanuel; Van Campenhout, Bjorn; and Nabwire, Leocardia. 2024. Expecting too much, foreseeing too little? Behavioral explanations for the sell low-buy high puzzle in smallholder market participation. MaSSP Report July 2024. Washington, DC: International Food Policy Research Institute. https://hdl.handle.net/10568/148993 |
| spellingShingle | household income prices smallholders surpluses De Weerdt, Joachim Dillon, Brian Hami, Emmanuel Van Campenhout, Bjorn Nabwire, Leocardia Expecting too much, foreseeing too little? Behavioral explanations for the sell low-buy high puzzle in smallholder market participation |
| title | Expecting too much, foreseeing too little? Behavioral explanations for the sell low-buy high puzzle in smallholder market participation |
| title_full | Expecting too much, foreseeing too little? Behavioral explanations for the sell low-buy high puzzle in smallholder market participation |
| title_fullStr | Expecting too much, foreseeing too little? Behavioral explanations for the sell low-buy high puzzle in smallholder market participation |
| title_full_unstemmed | Expecting too much, foreseeing too little? Behavioral explanations for the sell low-buy high puzzle in smallholder market participation |
| title_short | Expecting too much, foreseeing too little? Behavioral explanations for the sell low-buy high puzzle in smallholder market participation |
| title_sort | expecting too much foreseeing too little behavioral explanations for the sell low buy high puzzle in smallholder market participation |
| topic | household income prices smallholders surpluses |
| url | https://hdl.handle.net/10568/148993 |
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