Reference Points and Affordability Perceptions of Hybrid Maize Seed in Uganda: Evidence on Endowment and Expectations

ABSTRACT Despite demonstrated yield advantages, adoption of hybrid maize seed in Sub‐Saharan Africa remains low, raising questions about smallholders' perceptions of value and affordability. We examine whether farmers value hybrid maize seed differently depending on whether they already possess it or form expectations about likely prices or ownership, and how this affects willingness to pay (WTP) for a 1‐kg pack of seed in Uganda. We elicit WTP and willingness to accept (WTA) using Becker‐DeGroot‐Marschak auctions and measure ownership expectations with a multiple price list. The experiment tests three mechanisms: an endowment effect, by comparing WTP and WTA; price expectations, by randomly varying price probabilities; and ownership expectations, by varying the probability of keeping the seed for free. We find a strong endowment effect: farmers require substantially more money to give up seed they already possess than they are willing to pay to acquire the same seed, with WTA exceeding WTP by about 60%. The average WTP of UGX 4605 is well below the market price of UGX 8500. Loss aversion is associated with lower WTP and higher WTA, but these effects are small, imprecise, and do not explain the valuation gap. We do not find evidence that price expectations or ownership expectations generate economically meaningful reference points. Overall, our results indicate that current possession of seed is a more salient benchmark for valuation than forward‐looking expectations. These findings suggest that scaling strategies establishing early ownership, such as trial packs or plant‐now/pay‐after‐harvest schemes, may be more effective than attempts to shift price expectations alone.