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Abandoning Coffee under the Threat of Violence and the Presence of Illicit Crops. Evidence from Colombia

Author

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  • Ibáñez, Ana María
  • Muñoz, Juan Carlos
  • Verwimp, Philip

Abstract

This paper explores the importance of the risk of violence on the decision making of rural households, using a unique panel data set for Colombian coffee-growers. We identify two channels. First, we examine the direct impact of conflict on agricultural production through the change in the percentage of the farm allocated to coffee. Second, we explore how conflict generates incentives to substitute from legal agricultural production to illegal crops. Following Dercon and Christiaensen (2011), we develop a dynamic consumption model where economic risk and the risk of violence are explicitly included. Theoretical results are tested using a parametric and semi-parametric approach. We find a significant negative effect of the risk of violence and the presence of illegal crops on the decision to continue coffee production and on the percentage of the farm allocated to coffee. Results are robust after controlling for endogeneity bias and after relaxing the normality assumption.

Suggested Citation

  • Ibáñez, Ana María & Muñoz, Juan Carlos & Verwimp, Philip, 2013. "Abandoning Coffee under the Threat of Violence and the Presence of Illicit Crops. Evidence from Colombia," Documentos CEDE Series 161356, Universidad de Los Andes, Economics Department.
  • Handle: RePEc:ags:ulaedd:161356
    DOI: 10.22004/ag.econ.161356
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    File URL: http://ageconsearch.umn.edu/record/161356/files/CEDE%202013-35.pdf
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    References listed on IDEAS

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    1. Dercon, Stefan & Ayalew, Lulseged, 1995. "Smuggling and supply response: Coffee in Ethiopia," World Development, Elsevier, vol. 23(10), pages 1795-1813, October.
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    Cited by:

    1. repec:tse:wpaper:27881 is not listed on IDEAS
    2. Hopfensitz, Astrid & Miquel-Florensa, Josepa, 2014. "How forced displacement flows affect public good contributions: The social consequences of conflict in Colombia," TSE Working Papers 14-463, Toulouse School of Economics (TSE), revised Jun 2015.
    3. Vasquez Escallon, Juanita, 2015. "When too much punishment decreases legality. The case of coca-reducing policies in Colombia," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113156, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    Land Economics/Use; Production Economics;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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