Working Paper: NBER ID: w13395
Authors: Jorge Balat; Irene Brambilla; Guido Porto
Abstract: This paper explores the role of export costs in the process of poverty reduction in rural Africa. We claim that the marketing costs that emerge when the commercialization of export crops requires intermediaries can lead to lower participation into export cropping and, thus, to higher poverty. We test the model using data from the Uganda National Household Survey. We show that: i) farmers living in villages with fewer outlets for sales of agricultural exports are likely to be poorer than farmers residing in market-endowed villages; ii) market availability leads to increased household participation in export cropping (coffee, tea, cotton, fruits); iii) households engaged in export cropping are less likely to be poor than subsistence-based households. We conclude that the availability of markets for agricultural export crops help realize the gains from trade. This result uncovers the role of complementary factors that provide market access and reduce marketing costs as key building blocks in the link between the gains from export opportunities and the poor.
Keywords: Export Crops; Marketing Costs; Poverty Reduction; Uganda
JEL Codes: F10; F14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| export opportunities + domestic conditions (F10) | realization of gains from trade (F11) |
| lower marketing costs (M31) | increased participation in export cropping (Q17) |
| increased participation in export cropping (Q17) | reduced poverty (I32) |
| lower marketing costs (M31) | reduced poverty (I32) |
| export market density (F10) | reduced poverty (I32) |
| households engaged in export cropping (Q12) | less likely to be poor (I32) |