Joint work with Menusch Khadjavi and Rainer Thiele Market Exposure Raises Smallholders’ Competitive Behaviour and Closes the Gender Gap Kacana Sipangule Kiel Institute for the World Economy and the University of Goettingen, Germany Joint work with Menusch Khadjavi and Rainer Thiele World Bank Land and Poverty Conference Washington DC, USA March 22, 2017

Motivation Competitiveness is a key component for success in modern economies For instance, farmers compete for access to the best markets, employees compete for positions, scholars compete to have papers accepted at conference. Competitiveness is driven through Parental Influence (Almas et al., 2015; Khadjavi and Nicklisch, 2015) Societal Arrangements (Gneezy et al., 2003; Gneezy et al., 2009; Leibbrandt et al., 2013) However: Most societal arrangements occur endogenously and over a long time horizon. This makes it difficult to identify causal effects

vs This paper Research question Investigates how a rapid change in societal arrangements affects competitiveness. Research question How is smallholder competitiveness affected by rapid market integration via competitive large scale farms? vs

Research methods Measures of competitiveness based on Gneezy et al. (2009)’s Tossing experiment. Data collected from 932 adults and 410 children in 29 villages in Mumbwa and Mkushi Districts Data collection in August and September 2015 Experimental data complemented with Household and community surveys

Study design Random selection of villages in Mumbwa and Mkushi districts using maps from the Zambian Central Statistical Office 13 near (<15 km) and 16 (50-70 km) further villages. Minimum of 20 participants per village

Study site: Mumbwa district 6 _near villages 8 _further villages

Study site: Mkushi district 7 _near villages 8 _further villages

Procedures: Randomisation Smallholders randomly assigned into two separate groups for controlled, anonymous decision making

Procedures: Competitive decision Decision to compete in ball tossing task against another anonymous village member or not. OPTION A (no competition, piece-rate) OPTION B (competition + piece-rate) Every successful toss earns K5, independent from the score of the matched village member If higher score than match in village, then every successful toss earns K15 If equal score, then similar payments as in option A (K5) If lower score, then zero payment in this task

Asked to make tosses in isolation from other group members Procedures: Task Asked to make tosses in isolation from other group members

Result 1: No difference in scoring success between _near and _further villages.

Result 2: Smallholders in near villages behave more competitively

Result 2: Smallholders in near villages behave more competitively Independent Variable Competitive choice  (yes=1) _near villages (dummy, 1 = yes) 0.093** (0.042) 0.094** (0.040) Crop sale 0.124** (0.051) 0.122** (0.050) Male   0.031 (0.044) Household Head 0.025 (0.045) Age in years (continuous) -0.000 (0.001) … further control variables & robustness checks… … Constant -0.498** (0.194) -0.387 (0.352) Observations 842 832

Result 3: Smallholders selling on the market behave more competitively Independent Variable Competitive choice  (yes=1) _near villages (dummy, 1 = yes) 0.093** (0.042) 0.094** (0.040) Crop sale 0.124** (0.051) 0.122** (0.050) Male   0.031 (0.044) Household Head 0.025 (0.045) Age in years (continuous) -0.000 (0.001) … further control variables & robustness checks… … Constant -0.498** (0.194) -0.387 (0.352) Observations 842 832

Result 4: Females in near villages behave more competitively

Result 5: Girls in near villages behave more competitively

Conclusion Market exposure through proximity to large scale farms and through crop sales increases competitive behavior of smallholders. This increase is especially pronounced for females, where the gender gap is non-existent in near villages. Increased competitiveness can have important implications for smallholder market participation and educational performance of children however other developmental constraints will also have to be relaxed.