Executive Summary:

This paper examines how peer behavior influences smallholder producers’ (SSPs) decisions to purchase inputs and sell outputs in six sub-Saharan African countries. Using comparable, nationally representative panel data coupled with a correlated random effects framework, we assess the magnitude and form of social interactions that drive participation in input and output markets. We find strong, positive pair effects on seed, fertilizer, and pesticide adoption in Ghana, Nigeria, and Ethiopia, but weaker or negative effects in Tanzania, Uganda, and Malawi. In product markets, peer marketing strongly predicts individual marketing intensity in Ghana, Ethiopia, and Malawi. Nonlinear analyses reveal inverted U-shaped or U-shaped relationships, indicating that peer effects are strengthened in the early stages of diffusion, but weaken or even reverse once certain saturation thresholds are passed. These findings highlight that marketing is socially integrated and that taking advantage of peer dynamics can improve participation in agricultural markets.

Keywords: smallholders, social learning, peer effects, agricultural marketing, input adoption, product market participation, sub-Saharan Africa, panel data.