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Does food aid disrupt local food market? Evidence from rural Ethiopia

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  • Nathalie Ferrière
  • Akiko Suwa-Eisenmann

Abstract

This paper analyses empirically the impact of food aid on wheat production,sales and purchases in rural Ethiopia between 1994 and 2009. We distinguish between the impact at the intensive margin(on quantities)and at the extensive margin(on the very decision to produce or go to the market to buy or sell).The panel dimension allows us to deal with food aid selection. We find that the impact of food aid goes through the extensive margin while pure quantity effects,once controlled for market participationand production choice,are not significant. Foodaid reduces the probability of being a producer albeit the size of the effect is small. It also increases the probability of being a seller and decreases the probability of being a buyer after 2004,the year when the rules of food aid allocation changed in Ethiopia. Other factors such as storage capacity,distance to the nearest market,and the frequency the market is held also matter in the decision to sell or buy.

Suggested Citation

  • Nathalie Ferrière & Akiko Suwa-Eisenmann, 2014. "Does food aid disrupt local food market? Evidence from rural Ethiopia," FOODSECURE Working papers 26, LEI Wageningen UR.
  • Handle: RePEc:fsc:fspubl:26
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    4. Elsa Valli, 2017. "Essays on social protection," Economics PhD Theses 1017, Department of Economics, University of Sussex Business School.
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    More about this item

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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