The Effect of Household Wealth on Input Market Participation in Southern Africa

Input technological change, fundamental to rural transformation, sometimes bypasses some rural populations because farmers are often reluctant to use new inputs due to production and price risks that could render their use unprofitable. The level of wealth of the household significantly relates to the household's ability to cope with such risks. Given the highly disproportionate distribution of wealth among rural households, this paper demonstrated that first stratifying households into meaningful wealth categories and estimating non-separable household improved variety adoption and seed demand models for each wealth category provides an opportunity to develop credible policy relevant recommendations on interventions that increase impact. This approach contributes significantly to the methodological challenges of assessing seed demand in developing agriculture.