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Abstract
Household characteristics are commonly used to explain variation in smallholder
efficiency levels. The underlying assumption is that differences in intended behavior
are well described by such variables, while there is no a priori reason that this is the
case. Moreover, heterogeneity in farmer goals and preferences, in relation to the role
of the farm enterprise, are not well documented in developing countries. This paper
makes a contribution to fill this gap, by empirically determining heterogeneity in
farmer goals and attitudes in Nigeria through a pair-wise ranking, supplemented with
Likert scales. Factor analysis is used to reduce these data into behavioral factors. We
estimate technical and allocative efficiency levels and analyze how these are related to
farm characteristics and the identified behavioral factors. The models in which both
intended behavior and farmer characteristics are included give a significantly better fit
over models in which only household characteristics are included. These regression
results suggest that the socio-economic environment affects efficiency levels both
directly and indirectly, through changes in goals and attitudes. Additional research in
rural areas of developing countries should establish how agricultural policies should
account for this heterogeneity.