Household behaviour models of smallholder agricultural producers in Zimbabwe: A risk programming approach

This thesis uses stochastic optimization models to examine the behaviour and risk attitudes for smallholder producers in Zimbabwe. The objectives of the study were to investigate: (1) whether leisure should be modelled explicitly in household models; (2) risk preferences for a sample of smallholder producers; (3) whether results of partial sector household models are improved by increasing numbers of sectors modelled; (4) whether results of household models are improved by increasing numbers of risk parameters modelled; and (5) the potential for using household models in policy analysis. A Utility Efficient risk programming model was used to study household behaviour. The study uses household-farm level data for a sample of 199 households in Chivi District.; Results of investigations into whether leisure should be modelled explicitly in household models showed that leisure appeared to be relatively constant throughout the year. Results suggested that leisure need not be modelled explicitly.; Results of risk preference estimation showed that, apart from indeterminate cases, all wealth groups generally displayed high levels of risk aversion when compared to previous literature. Since previous studies were largely based on developed country studies, high values obtained in this study seemed plausible given the low incomes in the study area.; The issue of whether partial sector household models are improved by increasing the number of sectors modelled was investigated by comparing results for double and trisector models. Inconclusive results could be attributed to tradeoffs regarding complexities in modelling an extra sector (i.e., woodlands) versus the added completeness of incorporating this sector.; The issue of whether results of household models were improved by increasing the number of risk parameters modelled was investigated by comparing results for single and sector specific risk parameter models. There was little difference in results by wealth group suggesting that household behaviour could be adequately modelled using a univariate utility function.; Results showed that such models may be successfully applied to model a policy situation. The model correctly predicted that an increase in cash would be directed towards increasing dryland agricultural activities and that cash amounts would have to be increased significantly to impact household livelihoods.