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Seeds of Gold: How Environmental Considerations Influence Cacao Production Decisions for Small Landholder Households in Northwestern Ecuador

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  • Useche, Pilar
  • Blare, Trent
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    Abstract

    Many factors besides profit maximization such as nonmarket ecological and social benefits influence smallholder households to adopt one agricultural production system or another. Thus, different techniques are needed that take into consideration more than monetary income to fully capture these additional benefits in order to better understand the production decision of smallholder farmers. We build upon previous work on the household model and shadow wage estimation to develop a shadow wage for Ecuadorian cacao producers that includes these nonmarket benefits. We found that the shadow wage correctly indicated that these households would prefer to use an agroforestry production system instead of the more profitable modern system because these additional nonmarket benefits in additional to the economic benefits from participating in specialty markets make the traditional cropping system more attractive to these households.

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    Bibliographic Info

    Paper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 124738.

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    Date of creation: 2012
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    Handle: RePEc:ags:aaea12:124738

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    Keywords: Crop Production/Industries; Environmental Economics and Policy;

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