The Impacts of Fair Trade Certification: Evidence From Coffee Producers in Costa Rica

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Abstract:

We estimate the effects of Fair Trade (FT) certification on coffee producers in Costa Rica. We begin by examining a panel of all coffee producers between 1999 and 2010. We find that FT certification is associated with higher export prices equal to approximately 5 cents per pound. We find no evidence that certification is associated with more sales (either domestic or for export) or with higher domestic prices. Linking the mill-level information on FT certification to individual-level survey data, we find that FT certification does increase incomes, but only for skilled coffee growers and farm owners. There is no evidence that many workers, including unskilled seasonal coffee pickers, benefit from certification.