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Agricultural investments often carry labor costs and market risks, and spouses negotiate and bargain to settle their conflicting preferences for risk and differing views on individual labor costs. Using a lab-in-the-field experiment with a real-effort task, we analyze man, woman, and joint decision-making in those investments. Our experiment randomizes the assignment of the investment decision-maker and laborer performing the real-effort task. This randomization allows us to obtain the effects of gender-related and joint decision-making on the amount of labor-intensive investments, allocation of those investments between risky and not risky alternatives within households, and outcomes of those decisions. Our findings show that men prefer to take production and market risks more often than women, investing higher amounts in risky investments. However, those investments' returns are low, as they cannot complete the task in which they have invested. When couples jointly decide, they choose investment amounts in line with man spouse preferences; however, allocate investments between risky and not risky investments in line with woman preferences. We also find that woman spouses who have participated in a gender-related training program take more risks and the joint investment decisions of the couple are closer to woman investment decisions when compared to other couples. Our results are in line with previous studies on the behavioral aspects of agricultural investments and can guide organizations in improving program design to increase agricultural technology and crop adoption. This paper contributes to the scarce literature on behavioral aspects influencing the gender gap in agricultural production and technology adoption.

Production risk and market access put pressure on agricultural household production and food consumption decisions. Improving market access and promoting production diversity have been proposed as solutions to better agricultural household nutritional outcomes. Particularly with regards to production diversity, the efficacy of these solutions has been called into question. We show that the effectiveness of increased production diversity translating into improved household nutrition is dependent on levels of market participation and access. To demonstrate these results, this paper develops a non-separable agricultural household model with multiple agricultural goods for consumption and/or production, production risk, and imperfect markets. Households jointly maximize production, consumption, and marketing decisions. The model’s results are tested econometrically using nationally representative data from Tanzania. The paper contributes to a growing empirical literature concerning the relationships between production diversity, market access, and dietary diversity. We show that while on average a household needs to grow ten additional food groups to consume just one more food group, households not participating in markets need to grow just four more food groups to consume one more. This interaction explains why the literature typically finds weak correlations between dietary diversity and production diversity for typical households. The paper also contributes to the theoretical literature surrounding non-separable household models by providing a framework for understanding the role of markets and risk for household dietary diversity by developing. Our model provides economic theory consistent with existing empirical evidence and helps explain why most studies only find a small link between production diversity and dietary diversity.

Climate change will adversely affect agricultural production for small-scale farmers in developing countries. Many policy initiatives advise the use of climate-smart agriculture (CSA) practices to improve the adaptation of the farmers to the climate and reduce the adverse impacts of climate on agricultural production. Among others, the profitability of investing in agricultural practices is a significant factor that influences the adoption of agricultural practices among farmers in developing countries. Are CSA practices profitable for small-scale farmers in developing countries? We address this question by investigating the profitability of CSA practices in rural Tanzania. We conduct a cost-benefit analysis (CBA) in Iringa rural district in Tanzania for four CSA practices involving crop rotation or intercropping maize with early or late-maturing soybean varieties. Our findings show that CSA practices are financially profitable for those farmers. Investments in crop-rotation practices have higher net present values, internal rates of returns, and shorter payback periods when compared to intercropping. We do not find any differences in the profitability of early and late maturing seeds. Our robustness checks show that almost all our study population can make a profit from investing in those practices. However, the profitability of those practices depends on market interest rates (discount rates), labor cost, and maize prices. These findings imply that investments in CSA practices, such as crop rotation and intercropping of maize with soybean, have positive returns in short periods. These short payback periods make crop rotation with soybean a profitable investment option for small-scale farmers in rural areas with limited financial power. Policymakerscan support the use of CSA practices and design instruments to upscale the adoption of those practices, especially in rural Tanzania and in similar contexts.