We evaluate the impact of fair trade (FT) affiliation on a sample of around 250 producers from two different fair trade projects which widely differ in terms of average FT affiliation and local standard of living. On the descriptive side we find evidence of two types of externalities (FT affiliates have higher bargaining power also with local intermediaries and, in one project but not in the other, FT improves conditions also of local non FT affiliates). The FT price premium (difference between FT and traditional importers price) is substantial even though “ethical travelers” pay a price even higher than FT importers. On the econometric side we observe that, in both projects, producers’ income, weekly food consumption expenditure, the non food consumption share on total income, self evaluated relative standard of living and professional self esteem are significantly and positively correlated with affiliation years. Through its impact on consumption share and relative standard of living fair trade is also shown to have indirect significant effects on producers’ life satisfaction. We also find weaker but significant effects of fair trade affiliation on last year savings, while we do not observe significant differences between the treatment and control sample in terms of wealth proxies. Finally, with backast panel data we reconstruct farmers yearly decisions to send their children to school and find that FT affiliation has a significant and positive effect on them when children are between 15 and 18. The effect is stronger in the project in which producers have higher standard of living.
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