IDEAS home Printed from https://ideas.repec.org/p/hic/wpaper/150.html
   My bibliography  Save this paper

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

Author

Listed:
  • Ana María Ibañez Londoño

    (Universidad de los Andes- Colombia)

  • Juan Carlos Muñoz Mora

    (ECARES - Université Libre de Bruxelles)

  • Philip Verwimp

    (ECARES - Université Libre de Bruxelles)

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

  • Ana María Ibañez Londoño & Juan Carlos Muñoz Mora & Philip Verwimp, 2013. "Abandoning Coffee under the Threat of Violence and the Presence of Illicit Crops. Evidence from Colombia," HiCN Working Papers 150, Households in Conflict Network.
  • Handle: RePEc:hic:wpaper:150
    as

    Download full text from publisher

    File URL: http://www.hicn.org/wp-content/uploads/2012/06/HiCN-WP-150.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dercon, Stefan & Christiaensen, Luc, 2011. "Consumption risk, technology adoption and poverty traps: Evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 96(2), pages 159-173, November.
    2. Dercon, Stefan & Ayalew, Lulseged, 1995. "Smuggling and supply response: Coffee in Ethiopia," World Development, Elsevier, vol. 23(10), pages 1795-1813, October.
    3. Manuel Fern�ndez & Ana Mar�a Ib��ez & Ximena Pe�a, 2014. "Adjusting the Labour Supply to Mitigate Violent Shocks: Evidence from Rural Colombia," Journal of Development Studies, Taylor & Francis Journals, vol. 50(8), pages 1135-1155, August.
    4. Fafchamps, Marcel & Udry, Christopher & Czukas, Katherine, 1998. "Drought and saving in West Africa: are livestock a buffer stock?," Journal of Development Economics, Elsevier, vol. 55(2), pages 273-305, April.
    5. Joshua D. Angrist & Adriana D. Kugler, 2008. "Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 191-215, May.
    6. Richard Akresh & Philip Verwimp & Tom Bundervoet, 2011. "Civil War, Crop Failure, and Child Stunting in Rwanda," Economic Development and Cultural Change, University of Chicago Press, vol. 59(4), pages 777-810.
    7. Newey, Whitney K & Powell, James L & Walker, James R, 1990. "Semiparametric Estimation of Selection Models: Some Empirical Results," American Economic Review, American Economic Association, vol. 80(2), pages 324-328, May.
    8. Gaviria, Alejandro, 2000. "Increasing returns and the evolution of violent crime: the case of Colombia," Journal of Development Economics, Elsevier, vol. 61(1), pages 1-25, February.
    9. Patricia Justino, 2010. "War and Poverty," HiCN Working Papers 81, Households in Conflict Network.
    10. Marc Rockmore, 2017. "The Cost of Fear: The Welfare Effect of the Risk of Violence in Northern Uganda," The World Bank Economic Review, World Bank Group, vol. 31(3), pages 650-669.
    11. Paul Collier & Anke Hoeffler & Måns Söderbom, 2004. "On the Duration of Civil War," Journal of Peace Research, Peace Research Institute Oslo, vol. 41(3), pages 253-273, May.
    12. Moreno-Sanchez, Rocio & Kraybill, David S. & Thompson, Stanley R., 2003. "An Econometric Analysis of Coca Eradication Policy in Colombia," World Development, Elsevier, vol. 31(2), pages 375-383, February.
    13. Rosenzweig, Mark R & Binswanger, Hans P, 1993. "Wealth, Weather Risk and the Composition and Profitability of Agricultural Investments," Economic Journal, Royal Economic Society, vol. 103(416), pages 56-78, January.
    14. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
    15. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1384-1421.
    16. Eleonora Nillesen & Philip Verwimp, 2010. "A Phoenix in Flames? Portfolio Choice and Violence in Civil War in Rural Burundi," Research Working Papers 25, MICROCON - A Micro Level Analysis of Violent Conflict.
    17. Daniel Mejia & Daniel M. Rico, 2010. "La microeconomía de la producción y tráfico de cocaína en Colombia," Documentos CEDE 7293, Universidad de los Andes, Facultad de Economía, CEDE.
    18. Verwimp, Philip, 2003. "The political economy of coffee, dictatorship, and genocide," European Journal of Political Economy, Elsevier, vol. 19(2), pages 161-181, June.
    19. Foster, Andrew D. & Rosenzweig, Mark R., 2010. "Is There Surplus Labor in Rural India?," Center Discussion Papers 95273, Yale University, Economic Growth Center.
    20. Whitney K. Newey, 2009. "Two-step series estimation of sample selection models," Econometrics Journal, Royal Economic Society, vol. 12(s1), pages 217-229, January.
    21. Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
    22. Takahiro Ito & Takashi Kurosaki, 2007. "Weather Risk, Wages in Kind, and the Off-Farm Labor Supply of Agricultural Households in a Developing Country," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(3), pages 697-710.
    23. Barrett, C. B. & Reardon, T. & Webb, P., 2001. "Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications," Food Policy, Elsevier, vol. 26(4), pages 315-331, August.
    24. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
    25. Deininger,Klaus W., 2003. "Causes and consequences of civil strife - micro-level evidence from Uganda," Policy Research Working Paper Series 3045, The World Bank.
    26. Alain Janvry & Elisabeth Sadoulet, 2006. "Progress in the Modeling of Rural Households’ Behavior under Market Failures," Economic Studies in Inequality, Social Exclusion, and Well-Being, in: Alain Janvry & Ravi Kanbur (ed.), Poverty, Inequality and Development, chapter 0, pages 155-181, Springer.
    27. Harold Alderman & Christina H. Paxson, 1994. "Do the Poor Insure? A Synthesis of the Literature on Risk and Consumption in Developing Countries," International Economic Association Series, in: Edmar L. Bacha (ed.), Economics in a Changing World, chapter 3, pages 48-78, Palgrave Macmillan.
    28. Ana María Ibañez & Andrés Moya, 2010. "Do Conflicts Create Poverty Traps? Asset Losses and Recovery for Displaced Households in Colombia," NBER Chapters, in: The Economics of Crime: Lessons For and From Latin America, pages 137-172, National Bureau of Economic Research, Inc.
    29. Patricia Justino, 2009. "The Impact of Armed Civil Conflict on Household Welfare and Policy Responses," Research Working Papers 12, MICROCON - A Micro Level Analysis of Violent Conflict.
    30. Juan Carlos Munoz-Mora, 2010. "Los Caminos del Café: Aproximación a la Relación entre el Conflicto Armado Rural y la Producción Cafetera Colombiana," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 28(63), pages 14-65, December.
    31. Tilman Brück, 2004. "The Welfare Effects of Farm Household Activity Choices in Post-War Mozambique," HiCN Working Papers 04, Households in Conflict Network.
    32. Patrick Puhani, 2000. "The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 53-68, February.
    33. Charles F. Manski, 1989. "Anatomy of the Selection Problem," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 343-360.
    34. Eleonora Nillesen & Philip Verwimp, 2009. "Rebel Recruitment in a Coffee Exporting Economy," Research Working Papers 11, MICROCON - A Micro Level Analysis of Violent Conflict.
    35. Guido W. Imbens & Tony Lancaster, 1994. "Combining Micro and Macro Data in Microeconometric Models," Review of Economic Studies, Oxford University Press, vol. 61(4), pages 655-680.
    36. B. D. McCullough & H. D. Vinod, 2003. "Verifying the Solution from a Nonlinear Solver: A Case Study," American Economic Review, American Economic Association, vol. 93(3), pages 873-892, June.
    37. Bellows, John & Miguel, Edward, 2009. "War and local collective action in Sierra Leone," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1144-1157, December.
    38. Ahn, Hyungtaik & Powell, James L., 1993. "Semiparametric estimation of censored selection models with a nonparametric selection mechanism," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 3-29, July.
    39. Klaus Deininger, 2003. "Causes and consequences of civil strife: micro-level evidence from Uganda," Oxford Economic Papers, Oxford University Press, vol. 55(4), pages 579-606, October.
    40. Paul Collier & Anke Hoeffler, 2004. "Greed and grievance in civil war," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 563-595, October.
    41. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    42. Patricia Justino, 2006. "On the Links between Violent Conflict and Chronic Poverty: How Much Do We Really Know?," HiCN Working Papers 18, Households in Conflict Network.
    43. Anjini Kochar, 1999. "Smoothing Consumption by Smoothing Income: Hours-of-Work Responses to Idiosyncratic Agricultural Shocks in Rural India," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 50-61, February.
    44. Adriana Camacho, 2008. "Stress and Birth Weight: Evidence from Terrorist Attacks," American Economic Review, American Economic Association, vol. 98(2), pages 511-515, May.
    45. Di Tella, Rafael & Edwards, Sebastian & Schargrodsky, Ernesto (ed.), 2010. "The Economics of Crime," National Bureau of Economic Research Books, University of Chicago Press, number 9780226153742, December.
    46. Dercon, Stefan & Ayalew, Lulseged, 1995. "Smuggling and supply response: Coffee in Ethiopia," World Development, Elsevier, vol. 23(10), pages 1795-1813, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. Marc Rockmore, 2017. "The Cost of Fear: The Welfare Effect of the Risk of Violence in Northern Uganda," The World Bank Economic Review, World Bank Group, vol. 31(3), pages 650-669.
    4. Vasquez Escallon, Juanita, 2015. "When too much punishment decreases legality. The case of coca-reducing policies in Colombia," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113156, Verein für Socialpolitik / German Economic Association.
    5. María Aguilera Díaz, 2016. "Serranía del Perijá: Geografía, capital humano, economía y medio ambiente," Documentos de Trabajo Sobre Economía Regional y Urbana 15244, Banco de la República, Economía Regional.
    6. Verteramo Chiu, Leslie J. & Turvey, Calum G., 2015. "Perception and Action in a Conflict Zone: a Study of Rural Economy and Rural Life amidst Narcos in Northeastern Mexico," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205447, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. María Alejandra Arias & Ana María Ibáñez & Andrés Zambrano, 2014. "Agricultural Production Amid Conflict: The Effects of Shocks, Uncertainty, and Governance of Non-State Armed Actors," Documentos CEDE 11005, Universidad de los Andes, Facultad de Economía, CEDE.
    2. Arias, María Alejandra & Ibáñez, Ana María & Zambrano, Andrés, 2019. "Agricultural production amid conflict: Separating the effects of conflict into shocks and uncertainty," World Development, Elsevier, vol. 119(C), pages 165-184.
    3. Manuel Fern�ndez & Ana Mar�a Ib��ez & Ximena Pe�a, 2014. "Adjusting the Labour Supply to Mitigate Violent Shocks: Evidence from Rural Colombia," Journal of Development Studies, Taylor & Francis Journals, vol. 50(8), pages 1135-1155, August.
    4. Patricia Justino, 2012. "Nutrition, Governance and Violence: A Framework for the Analysis of Resilience and Vulnerability to Food Insecurity in Contexts of Violent Conflict," HiCN Working Papers 132, Households in Conflict Network.
    5. Tilman Brück & Patricia Justino & Philip Verwimp & Andrew Tedesco & Alexandra Avdeenko, 2013. "Measuring Conflict Exposure in Micro-Level Surveys," HiCN Working Papers 153, Households in Conflict Network.
    6. Moya, Andrés, 2018. "Violence, psychological trauma, and risk attitudes: Evidence from victims of violence in Colombia," Journal of Development Economics, Elsevier, vol. 131(C), pages 15-27.
    7. Mayra Buvinic & Monica Das Gupta & Ursula Casabonne & Philip Verwimp, 2013. "Violent Conflict and Gender Inequality: An Overview," The World Bank Research Observer, World Bank Group, vol. 28(1), pages 110-138, February.
    8. Hönig, Tillman, 2017. "The Impact of Peace: Evidence from Nigeria," MPRA Paper 83302, University Library of Munich, Germany.
    9. Martin-Shields, Charles P. & Stojetz, Wolfgang, 2019. "Food security and conflict: Empirical challenges and future opportunities for research and policy making on food security and conflict," World Development, Elsevier, vol. 119(C), pages 150-164.
    10. Gimenez-Nadal, José Ignacio & Molina, José Alberto & Silva Quintero, Edgar, 2016. "How Forced Displacements Caused by a Violent Conflict Affect Wages in Colombia," IZA Discussion Papers 9926, Institute of Labor Economics (IZA).
    11. Brück, Tilman & Justino, Patricia & Verwimp, Philip & Avdeenko, Alexandra, 2010. "Identifying Conflict and Violence in Micro-Level Surveys," IZA Discussion Papers 5067, Institute of Labor Economics (IZA).
    12. Janus, Thorsten, 2012. "Natural resource extraction and civil conflict," Journal of Development Economics, Elsevier, vol. 97(1), pages 24-31.
    13. Tilman Brück & Patricia Justino & Philip Verwimp & Alexandra Avdeenko & Andrew Tedesco, 2016. "Measuring Violent Conflict in Micro-level Surveys: Current Practices and Methodological Challenges," The World Bank Research Observer, World Bank Group, vol. 31(1), pages 29-58.
    14. Bove, Vincenzo & Gavrilova, Evelina, 2014. "Income and Livelihoods in the War in Afghanistan," World Development, Elsevier, vol. 60(C), pages 113-131.
    15. Gaurav, Sarthak, 2015. "Are Rainfed Agricultural Households Insured? Evidence from Five Villages in Vidarbha, India," World Development, Elsevier, vol. 66(C), pages 719-736.
    16. Tillman Hönig, 2019. "The Impact of Peace: Evidence from Nigeria," HiCN Working Papers 293, Households in Conflict Network.
    17. Janus, Thorsten & Riera-Crichton, Daniel, 2015. "Economic shocks, civil war and ethnicity," Journal of Development Economics, Elsevier, vol. 115(C), pages 32-44.
    18. Renata Baborska & Emilio Hernandez & Emiliano Magrini & Cristian Morales-Opazo, 2020. "The impact of financial inclusion on rural food security experience: A perspective from low-and middle-income countries," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 10(2), pages 1-18.
    19. Jin, Ling & Chen, Kevin Z. & Yu, Bingxin & Filipski, Mateusz, 2015. "Farmers' Coping Strategies against an Aggregate Shock: Evidence from the 2008 Sichuan Earthquake," 2015 Conference, August 9-14, 2015, Milan, Italy 211814, International Association of Agricultural Economists.
    20. repec:hal:wpspec:info:hdl:2441/3vl5fe4i569nbr005tctlc8ll5 is not listed on IDEAS
    21. Ang, James B. & Gupta, Satyendra Kumar, 2018. "Agricultural yield and conflict," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 397-417.

    More about this item

    Keywords

    selection model; armed conflict; illicit crop; coffee production;
    All these keywords.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hic:wpaper:150. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tilman Brück or the person in charge or the person in charge or the person in charge (email available below). General contact details of provider: https://hicn.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.