Traceability, value, and trust in the coffee market: A natural experiment in Ethiopia

Ludovic Mbakop (), Glenn Jenkins (), Leonard Leung () and Kamil Sertoglu ()
Additional contact information
Ludovic Mbakop: Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus via Mersin 10, Turkey
Leonard Leung: Asian Development Bank, Manilla, The Philippines
Kamil Sertoglu: Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus via Mersin 10, Turkey

No 2023-03, Development Discussion Papers from JDI Executive Programs

Abstract: This study measures the impact of traceability attributes on international buyers’ willingness to pay for coffee produced in Ethiopia and the impact of accurate information on the production location of the coffee on the pricing according to its type and grade. Two sets of regressions models were used to investigate the important determinant factors affecting the export prices of trader and producer coffee, one each for trader and producer coffee, to measure the impact of the ECX on the prices and to evaluate the effect of the coffee types and grades on the prices. The results show that after coffee was forced to be traded via the ECX, traceable coffee export prices increased more than the reported price of non-traceable coffee. We also found that after the introduction of the ECX, the reported export prices of coffee were much more closely aligned to the movements in the international prices of coffee than before the ECX. Furthermore, we also find evidence that exporters and overseas buyers do not trust the results of the inspection and grading of coffee by the ECX unless traceability is also present. This is the first study to evaluate foreign buyers’ willingness to pay for the attribute of traceability of Ethiopian coffee and to see how traceability has affected buyers’ trust in the grades given by the ECX for the coffee it graded.

Keywords: Ethiopian commodity exchange; Ethiopian coffee; Coffee traceability; Commoditization. (search for similar items in EconPapers)
JEL-codes: D40 E23 Q17 (search for similar items in EconPapers)
Pages: 16 Pages
Date: 2023-04-08
New Economics Papers: this item is included in nep-agr, nep-dcm and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Traceability, Value, and Trust in the Coffee Market: A Natural Experiment in Ethiopia (2023)
Working Paper: Traceability, value, and trust in the coffee market: A natural experiment in Ethiopia (2023)
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