IDEAS home Printed from https://ideas.repec.org/p/csa/wpaper/1995-05.html
   My bibliography  Save this paper

Smuggling and supply response: coffee in Ethiopia

Author

Listed:
  • Stefan Dercon
  • Lulseged Ayalew

Abstract

During the 1980s substantial smuggling of coffee has been taking place in Ethiopia. The recent devaluation has raised hopes that substantial quantities of coffee will flow back to the official channels. Data on the incentives to supply to the different channels is collated. A model of official supplies is formulated which nests an empirical test between the smuggling models by Bhagwati and Hansen (1973) and by Pitt (1981). The econometric results favour the latter, and show a small but significant effect of the premium in the black market and a positive total supply response, relative to the main competing crop, chat. The results imply that the increases in export eantings from the devaluation will be quite limited.

Suggested Citation

  • Stefan Dercon & Lulseged Ayalew, 1995. "Smuggling and supply response: coffee in Ethiopia," CSAE Working Paper Series 1995-05, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:1995-05
    as

    Download full text from publisher

    File URL: https://ora.ox.ac.uk/objects/uuid:3558aebf-9e88-4fc5-9237-2fba8a1538cd
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bevan, D. L. & Bigsten, A. & Collier, P. & Gunning, J. W., 1987. "Peasant supply response in rationed economies," World Development, Elsevier, vol. 15(4), pages 431-439, April.
    2. de Janvry, Alain & Fafchamps, M. & Sadoulet, Elisabeth, 1991. "Peasant Household Behavior with Missing Markets: Some Paradoxes Explain," CUDARE Working Papers 198579, University of California, Berkeley, Department of Agricultural and Resource Economics.
    3. Jagdish Bhagwati, 1981. "Alternative theories of illegal trade : Economic consequences and statistical detection," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 117(3), pages 409-427, September.
    4. Azam, Jean-Paul & Besley, Timothy, 1989. "General equilibrium with parallel markets for goods and foreign exchange: Theory and application to Ghana," World Development, Elsevier, vol. 17(12), pages 1921-1930, December.
    5. Azam, Jean-Paul & Besley, Timothy, 1991. "Peasant supply response under rationing: The role of the food market," European Journal of Political Economy, Elsevier, vol. 7(3), pages 331-343, October.
    6. Devarajan, Shantayanan & Jones, Christine & Roemer, Michael, 1989. "Markets under price controls in partial and general equilibrium," World Development, Elsevier, vol. 17(12), pages 1881-1893, December.
    7. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    8. Jagdish Bhagwati & Bent Hansen, 1973. "A Theoretical Analysis of Smuggling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(2), pages 172-187.
    9. Dercon, Stefan, 1993. "Peasant Supply Response and Macroeconomic Policies: Cotton in Tanzania," Journal of African Economies, Centre for the Study of African Economies, vol. 2(2), pages 157-194, October.
    10. Askari, Hossein & Cummings, John Thomas, 1977. "Estimating Agricultural Supply Response with the Nerlove Model: A Survey," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 257-292, June.
    11. Marian E. Bond, 1983. "Agricultural Responses to Prices in Sub-Saharan African Countries (Réactions du secteur agricole aux prix en Afrique au sud du Sahara) (Reacciones de la agricultura ante los precios en los países de," IMF Staff Papers, Palgrave Macmillan, vol. 30(4), pages 703-726, December.
    12. Pitt, Mark M., 1981. "Smuggling and price disparity," Journal of International Economics, Elsevier, vol. 11(4), pages 447-458, November.
    13. de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, vol. 101(409), pages 1400-1417, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ana Mar�a Iba�ez Londo�o & Juan Carlos Mu�oz Mora & Philip Verwimp, 2013. "Abandoning Coffee under the Threat of Violence and the Presence of Illicit Crops. Evidence from Colombia," HiCN Working Papers 150, Households in Conflict Network.
    2. Worako, T.K. & Jordaan, H. & Van Schalkwyk, H.D., 2011. "Investigating Volatility in Coffee Prices Along the Ethiopian Coffee Value Chain," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 50(3), September.
    3. Seneshaw Tamru & Bart Minten & Johan Swinnen, 2021. "Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 81-95, January.
    4. Dercon, Stefan, 2006. "Economic reform, growth and the poor: Evidence from rural Ethiopia," Journal of Development Economics, Elsevier, vol. 81(1), pages 1-24, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ruben, Ruerd & Moll, Henk & Kuyvenhoven, Arie, 1998. "Integrating agricultural research and policy analysis: analytical framework and policy applications for bio-economic modelling," Agricultural Systems, Elsevier, vol. 58(3), pages 331-349, November.
    2. Connely, Michael & Devereux, John & Cortes, Mariluz, 1995. "The transhipment problem: Smuggling and welfare in Paraguay," World Development, Elsevier, vol. 23(6), pages 975-985, June.
    3. Gebremedhin, Berhanu & Pender, John L., 2004. "Strategies To Improve Land Management, Crop Production, And Household Income In The Highlands Of Tigray, Northern Ethiopia," 2004 Annual meeting, August 1-4, Denver, CO 20161, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    5. Allen, James E. IV, 2014. "Determinants of Land Allocation in a Multi-Crop Farming System: An Application of the Fractional Multinomial Logit Model to Agricultural Households in Mali," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170175, Agricultural and Applied Economics Association.
    6. Zhihao Zheng & Yang Gao & Rodolfo M. Nayga & Yinyu Zhao, 2023. "Policy reform and farmers' coping strategies: The case of corn price shocks in Heilongjiang Province of China," Review of Development Economics, Wiley Blackwell, vol. 27(2), pages 1135-1156, May.
    7. Jourdain C. Lokossou & Hippolyte D. Affognon & Alphonse Singbo & Michel B. Vabi & Ayoni Ogunbayo & Paul Tanzubil & Alcade C. Segnon & Geoffrey Muricho & Haile Desmae & Hakeem Ajeigbe, 2022. "Welfare impacts of improved groundnut varieties adoption and food security implications in the semi-arid areas of West Africa," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(3), pages 709-728, June.
    8. Wubneshe Dessalegn Biru & Manfred Zeller & Tim K. Loos, 2020. "The Impact of Agricultural Technologies on Poverty and Vulnerability of Smallholders in Ethiopia: A Panel Data Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(2), pages 517-544, January.
    9. Mai, Nhat Chi, 2013. "Essays on Farm Household Decision-Making: Evidence from Vietnam," OSF Preprints 96azx, Center for Open Science.
    10. Lamb, Russell L., 2000. "Food crops, exports, and the short-run policy response of agriculture in Africa," Agricultural Economics, Blackwell, vol. 22(3), pages 271-298, April.
    11. Asfaw, Solomon & Shiferaw, Bekele & Simtowe, Franklin & Lipper, Leslie, 2012. "Impact of modern agricultural technologies on smallholder welfare: Evidence from Tanzania and Ethiopia," Food Policy, Elsevier, vol. 37(3), pages 283-295.
    12. Cécile Daubrée, 1994. "Analyse micro-économique de la contrebande et de la fraude documentaire, avec références aux économies africaines," Revue Économique, Programme National Persée, vol. 45(2), pages 165-192.
    13. Liverpool-Tasie, Lenis Saweda, 2012. "Targeted Subsidies and Private Market Participation: An Assessment of Fertilizer Demand in Nigeria:," IFPRI discussion papers 1194, International Food Policy Research Institute (IFPRI).
    14. Shiferaw, Bekele & Holden, Stein, 1999. "Soil Erosion and Smallholders' Conservation Decisions in the Highlands of Ethiopia," World Development, Elsevier, vol. 27(4), pages 739-752, April.
    15. Momanyi, Denis & Lagat, Prof. Job K. & Ayuya, Dr. Oscar I., 2016. "Analysis of the Marketing Behaviour of African Indigenous Leafy Vegetables among Smallholder Farmers in Nyamira County, Kenya," MPRA Paper 69202, University Library of Munich, Germany, revised 27 Jan 2016.
    16. Smith, Lisa C. & Chavas, Jean-Paul, 1999. "Supply response of West African agricultural households," FCND discussion papers 69, International Food Policy Research Institute (IFPRI).
    17. Sheahan, Megan & Black, Roy & Jayne, T.S., 2013. "Are Kenyan farmers under-utilizing fertilizer? Implications for input intensification strategies and research," Food Policy, Elsevier, vol. 41(C), pages 39-52.
    18. Barrett, Christopher B., 1998. "Immiserized growth in liberalized agriculture," World Development, Elsevier, vol. 26(5), pages 743-753, May.
    19. Mariapia Mendola, 2004. "Migration and Technological Change in Rural Households: Complements or Substitutes?," Development Working Papers 195, Centro Studi Luca d'Agliano, University of Milano.
    20. Sheahan, Megan & Black, Roy & Jayne, Thomas S., 2012. "Are Farmers Under-Utilizing Fertilizer? Evidence from Kenya," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126739, International Association of Agricultural Economists.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:csa:wpaper:1995-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Julia Coffey (email available below). General contact details of provider: https://edirc.repec.org/data/csaoxuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.