Do Adverse Events Influence Time Preferences? Evidence From Smallholder African Farmers

Abstract

Time preferences play a critical role in the agri-food value chains of low-income countries, impacting the choices of local operators, including innovation uptake. This paper assesses the association between smallholder farmers' individual characteristics, their exposure to diverse adverse events, and their intertemporal choices using in-the-field experiments conducted across five African countries. By jointly estimating time and risk preferences, we find that farmers who have experienced social setbacks during the previous year are more likely to be patient. This suggests that time preferences may vary over time, particularly when farmers are exposed to social distress (e.g., food shortage, health issues, violence, or crime). Moreover, we find gender to be a prominent factor associated with farmers' time preferences, with female farmers showing greater patience. These findings hold direct implications for both research and public policy initiatives aimed at influencing agricultural choices in the aftermath of social distress. By understanding the factors influencing time preferences, policy practitioners can develop more targeted and effective strategies to support smallholder farmers, thereby enhancing the resilience of agri-food value chains in low-income countries.