Export Commodity Dependence and Vulnerability to Poverty

Tseday J. Mekasha, Kenneth Mdadila, Jehovaness Aikaeli and Finn Tarp
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Tseday J. Mekasha: University of Copenhagen, Department of Economics
Kenneth Mdadila: University of Dar es Salaam, School of Economics
Jehovaness Aikaeli: University of Dar es Salaam, School of Economics

No 22-14, DERG working paper series from University of Copenhagen. Department of Economics. Development Economics Research Group (DERG)

Abstract: In this paper we explore the link between commodity dependence and vulnerability to poverty in rural Tanzania with a particular focus on coffee-growing households. Even if the vulnerability rate is quite high in rural Tanzania, our results show, on average, that coffee growers have a lower probability of being poor and vulnerable compared to non-growers. However, when coffee growers are disaggregated into small and large, we see that the result is mainly driven by large coffee growers. For small coffee growers, on the other hand, we do not find evidence to suggest that they are different from non-growers in terms of both poverty and vulnerability. When we disaggregate vulnerability into its components, poverty-induced vs risk-induced vulnerability, we find co ee growers to have a relatively higher probability of facing risk-induced vulnerability compared to non-growers. There are, however, heterogeneities in terms of the size of coffee growers. In particular, relative to non-growers, small coffee growers have a relatively higher probability of facing risk-induced vulnerability. On the other hand, conditional on being vulnerable, large coffee growers do not appear to have a statistically significant difference in their probability of facing a riskinduced vulnerability compared to non-coffee growers. These results indicate not only the need for vulnerability-reducing policies but also the importance of identifying the source of vulnerability as the choice of the right type of policy intervention depends on understanding the causes of vulnerability.

Keywords: Commodity dependence, Poverty; Vulnerability; Tanzania (search for similar items in EconPapers)
JEL-codes: D31 I32 (search for similar items in EconPapers)
Pages: 32
Date: 2022
New Economics Papers: this item is included in nep-agr, nep-dev and nep-int
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