Towards a Theory of Voluntary Livestock Keeper Behaviour Under Climate Variability and Market Risk in Nigerian Pastoral Systems

This study develops a theoretical framework for explaining and predicting voluntary livestock keeper behaviour under climate variability and market risk in Nigerian pastoral systems, applying behavioural economics and decision theory to advance understanding of why pastoral management decisions diverge from externally recommended optimal strategies. Pastoral livestock management in semi-arid Nigeria involves complex decision-making under multiple simultaneous uncertainties including rainfall timing and quantity, disease outbreak probability, grass and market price fluctuations, and conflict risk. Standard economic models assuming rational expected utility maximisation inadequately explain observed behaviour including herd accumulation beyond current productivity optima, reluctance to destock during droughts, and preference for species diversity over specialisation. This study develops a theoretical framework drawing on prospect theory, hyperbolic time discounting, social norms theory, and portfolio optimisation under uncertainty, calibrated to Nigerian pastoralist decision-making contexts. Empirical data are generated from incentive-compatible field experiments with 480 pastoralist households in Sokoto, Katsina, and Borno States measuring risk preferences, time preferences, and social norm influences on livestock management decisions. Agent-based modelling simulates pastoral system dynamics under empirically derived behavioural parameters across climate scenarios. Findings reveal strong loss aversion in livestock restocking decisions (loss aversion coefficient 2.8), present-biased time preferences in investment decisions, and strong social conformity effects on herd size norms that override individual economic optimisation. The ABM shows that behavioural-realistic models project dramatically different pastoral system dynamics than rational actor models under the same climate scenarios. The study recommends behaviourally informed extension communication strategies and policy designs.

Keywords: pastoral behaviour, prospect theory, decision theory, Nigerian pastoralists, agent-based modelling.