Behavioural Case Studies on the Role of Knowledge, Peer Influence, and Market Intermediaries in Farmers' Sustainable Decision-Making

The United Nations established the Sustainable Development Goals which encourage farmers to reimagine conventional farming methods passed down through generations. Farmers must now balance their immediate need for productivity with their responsibility to safeguard resources for their communities and future generations. Even though sustainable practices are widely acknowledged to improve environmental, economic, and social outcomes, their adoption in developing countries remains limited. It also remains uncertain whether farmers in developing country supply chains are willing to embrace more sustainable production methods and whether current sustainability measures adequately address their needs. Additionally, the effectiveness of interventions that leverage knowledge transfer or peer influence mechanisms in promoting sustainable decision-making among farmers requires further investigation.

Sustainable investments can involve complex intertemporal trade-offs where agents weigh private costs in the present against collective benefits in the future. This thesis conceptualises sustainable agricultural investments as a collective action problem, assuming rational, profit-maximising agents who prioritise private returns over the provision of sustainable public goods.

Through three complementary empirical case studies, this thesis examines the behavioural determinants of sustainable agricultural practice adoption using a lab-in-the-field experiment methodology. These experiments were conducted with 310 smallholder coffee farmers in Vietnam and 86 small-scale traders in Ghana and Vietnam. The first empirical chapter investigates how information interventions can alter the willingness of coffee farmers to fund a sustainable water use lecture for their community. The second empirical chapter builds upon the first chapter by testing the influence farmers' peers can have in steering each other towards more socially optimal sustainable outcomes. The third empirical chapter presents a serious game that tested small-scale traders' willingness to advocate for sustainability within their supply chains.

The first two chapters use a threshold public good game to measure farmers' trade-offs between private returns and collective contributions towards education on sustainable water management in coffee farming. Chapter One evaluates the impact of information provision on farmers' willingness to contribute towards the community-level sustainable public good. As treatment was administered at the village level, standard errors are clustered at the village level to account for within-village correlation. The analysis revealed information treatments did not appear to significantly increase average contribution rates. However, information treatment groups showed higher allocative efficiency by contributing more of their endowment above the threshold than control groups (suggesting better understanding of collective action dynamics).

Chapter Two incorporates structured peer discussion into the experimental design employed in the first chapter. These discussion opportunities matched with information provision significantly increased the propensity to invest sustainably by 12.9 percentage points relative to control conditions. This finding underscores the critical role of peer pressure and social learning in the diffusion of sustainable information to bring about more proactive engagement with agricultural sustainability.

Chapter Three extends the analysis to market intermediaries through a sustainable trade simulation game examining 86 small-scale traders (62 Vietnamese coffee, 24 Ghanaian cocoa) in their respective value chains. The results from gameplay responses demonstrated that lower implementation costs and positive framing appear to enhance the attractiveness of sustainable investments. Market intermediaries also exhibit greater responsiveness to promote sustainable practices within their supply networks when faced with higher rates of environmental degradation and the consequences of inaction are more severe.

These findings contribute to the behavioural economics literature on transitions towards more sustainable agriculture, experimental applications of game theory in development contexts, and the role of communication in collective action problems. The research provides empirical evidence for policy interventions targeting information provision schemes towards both farmers and market intermediaries to amplify the spread of sustainable practices as well as supporting the efficacy of peer-learning workshops.