Heterogeneous Farm Household Responses to Market Integration: Evidence from Panel Data Across Nigerian States

Market integration affects farm households heterogeneously depending on their net buyer or net seller status, asset endowments, risk preferences, and institutional access, creating winners and losers from the same policy-induced market development intervention. This dissertation investigates heterogeneous farm household responses to market integration processes across Nigerian states over the period 2015 to 2024, exploiting policy-induced variation in road quality improvements as a quasi-natural experiment affecting market access costs. A nationally representative panel dataset of 700 farm households from seven states spanning all six geopolitical zones was constructed through repeated structured surveys. The theoretical framework draws on the agricultural household model under incomplete markets, extended to allow heterogeneous responses based on household net market position and risk exposure. Identification exploits staggered road rehabilitation completion across communities as exogenous variation in market integration timing. Heterogeneous treatment effects are estimated using the Callaway-Sant'Anna difference-in-differences estimator robust to staggered adoption designs. Results indicate that net seller households experienced income gains of 18 percent from market integration, while net buyer households with limited own production experienced food expenditure increases of 12 percent without compensating income gains. Asset-poor households were less able to adjust production in response to market integration signals, dampening their income gains. The study makes an original contribution to the heterogeneous treatment effects literature in agricultural development economics, with specific evidence for the design of market integration programmes that include safety nets for net buyer farm households in Nigeria. Keywords: market integration, heterogeneous effects, farm households, panel data, Nigeria