Understanding household farming behavior among smallholders is an essential element of land-change studies inasmuch as a considerable portion of the world is dominated by land-users of this kind. Smallholders (peasants in some literature) are especially important within the tropical forests of Mexico, and the southern Yucatán peninsular region is no exception. This region, as elsewhere in the tropics, is characterized by underdeveloped markets and the consequent partial engagement of frontier farmers as market participants. Sparse exchange opportunities resulting from remoteness, low population density, and poorly developed infrastructure constrain these farmers to maintain a strong focus on consumption production, especially in terms of staple foods. Indeed, until the late 1960s, households in the region were totally subsistence-based and had virtually no experience with the agricultural market. Today, smallholder farmers retain consumption production, though a growing proportion also produce crops for sale. While this dual position in the market and in subsistence is an increasingly prevalent feature of smallholder farmers throughout the developing world, studies of deforestation commonly ascribe to them a wholly commercial orientation by employing profit-maximizing theoretical structures as a basis for econometrically modeling their land-use decisions (e.g. Chomitz and Gray 1996; Cropper, Griffiths, and Mani 1999; Cropper, Puri, and Griffiths 2001; Nelson, Harris, and Stone 2001; Nelson and Hellerstein 1997; Panayotou and Sungsuwan 1994; Pfaff 1999). In essence, the assertion of profit-maximization rests on the assumption that agents are fully engaged in markets, from which it follows that production, being strictly a function of farm technology and exogenously given input and output prices, is entirely independent of consumption and labor supply (Barnum and Squire 1979). This chapter explores the implications of relaxing the perfect-markets assumption for the modeling of semi-subsistence and commercial land-use decisions. By introducing variables measuring the consumption side of the colonist household, evidence is presented to suggest that, consistent with mixed or hybrid production themes (e.g. Singh, Squire, and Strauss 1986; Turner and Brush 1987), farmers operating in a context of thin product and/or labor markets do not exhibit behavior corresponding to that of a commercially oriented profit-maximizing farm.
An Empirical Model of Behavioral Heterogeneity