Market participation and sale of potatoes by smallholder farmers in the central highlands of Angola: A Double Hurdle approach

This paper uses a double hurdle regression analysis to estimate the factors influencing marketing decisions among potato growers in the central highlands of Angola, focusing on gender of household head, productive asset ownership and transaction costs. Although the results suggest that the quantity produced is exogenous in the models for market participation and for quantity sold, the methodology used provides a framework for others to follow when endogeneity is suspected in one or more variables. The wealth analysis suggests that potato growers, potato sellers and male heads were richer than their counterparts. The linear regression results on quantity produced suggest that female-headed households produced less than their male counterparts, owning productive assets or having access to public assets had no statistical effect on production, and that farmers who used fertilizer produced more than farmers who didn’t apply fertilizer to their fields. The double hurdle regression results suggest that (1) male-headed households were more likely to sell potatoes, (2) owning productive assets and having access to government extension services, conditional on market participation, positively affected the quantity sold, (3) transaction costs, conditional on market participation, negatively affected the quantity sold, and (4) quantity produced was a marginally significant positive factor on both the likelihood of selling potatoes and the quantity sold. In contrast, the unconditional average partial effects suggest that, (1) potato sales were gender neutral, (2) owning productive assets had no statistical effect on quantity sold, (3) transaction costs negatively affected the quantity sold, and (4) having access to extension services and the quantity produced both positively affected the quantity sold. Thus, to boost sales, investments may be needed to promote farmer participation in organizations and/or establish farmer organizations in villages without them, increase farmers’ access to extension services, invest in infrastructure, and help farmers increase their production.