FAIR TRADE AND FREE ENTRY: CAN A DISEQUILIBRIUM MARKET SERVE AS A DEVELOPMENT TOOL?

• 成果类型: Article
• 署名作者: de Janvry, Alain; McIntosh, Craig; Sadoulet, Elisabeth
• 署名单位: University of California System; University of California Berkeley; University of California System; University of California San Diego
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/REST_a_00512
• 发表日期: 2015-07
• 页码: 567-573
• 关键词: coffee; price; pay

摘要

The Fair Trade (FT) coffee initiative attempts to channel charity from consumers to poor producers via increased prices. We show that the rules of the FT system permit this rent to be eliminated due to free entry and costly excess certification of output. Using data from an association of coffee cooperatives in Central America, we verify that expected producer benefits are close to 0 when we take into account the output that is certified but not sold as FT. Our results illustrate how free entry undermines the attempt at extending charity via a price distortion in an otherwise competitive market.