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Middlemen, Non-Profits, and Poverty

Author

Listed:
  • Chau, Nancy H.

    (Cornell University)

  • Goto, Hideaki

    (National Graduate Institute for Policy Studies Japan)

  • Kanbur, Ravi

    (Cornell University)

Abstract

In many markets in developing countries, especially in remote areas, middlemen are thought to earn excessive profits. Non-profits come in to counter what is seen as middlemen's market power, and rich country consumers pay a "fair-trade" premium for products marketed by such non-profits. This paper provides answers to the following five questions. How exactly do middlemen and non-profits divide up the market? How do the price mark up and price pass-through differ between middleman and non-profits? What is the impact of non-profits entry on the wellbeing of the poor? Should the government subsidize the entry of non-profits, or the entry of middlemen? Should wealthy consumers in the North pay a premium for fair trade products, or should they support fair trade non-profits directly?

Suggested Citation

  • Chau, Nancy H. & Goto, Hideaki & Kanbur, Ravi, 2009. "Middlemen, Non-Profits, and Poverty," IZA Discussion Papers 4406, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4406
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    Cited by:

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    2. Bunyada Laoprapassorn, 2022. "Entry and Spatial Competition of Intermediaries: Evidence from Thailand's Rice Market," PIER Discussion Papers 170, Puey Ungphakorn Institute for Economic Research.
    3. Tharakan, Joe & Lefèvre, Mélanie, 2011. "Intermediaries, transport costs and interlinked transactions," CEPR Discussion Papers 8615, C.E.P.R. Discussion Papers.
    4. Huang, Jikun & Wu, Yunhua & Yang, Zhijian & Rozelle, Scott & Fabiosa, Jacinto & Dong, Fengxia, 2012. "Marketing China's milk: A case study of the sales activity of dairy farmers in greater Beijing," China Economic Review, Elsevier, vol. 23(3), pages 675-689.
    5. Ngo Chi Thanh, 2018. "Middlemen Market Power and Land Reform Policy Implication: An Imperfect Competition Analysis for the Traditional Food Market of Vietnam," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(5), pages 31-40, May.
    6. M. Shahe Emran & Dilip Mookherjee & Forhad Shilpi & M. Helal Uddin, "undated". "Do Consumers Benefit from Supply Chain Intermediaries? Evidence from a Policy Experiment in Edible Oils Market in Bangladesh," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-273, Boston University - Department of Economics.
    7. Pol Antràs & Arnaud Costinot, 2011. "Intermediated Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(3), pages 1319-1374.

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    More about this item

    Keywords

    middlemen; non-profits; poverty; market access;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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