Coca as a subsistence good: Displacement of food expenditure and habitual consumption in Bolivia and Peru (2006–2024)

Juan Marcelo Gutierrez Miranda
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Juan Marcelo Gutierrez Miranda: Todo Econometría

Spanish Stata Conference 2026 from Stata Users Group

Abstract: Coca leaf chewing (acullico) is typically viewed as a cultural custom. This presentation—which extends the evidence documented for Bolivia by Gutierrez Miranda (2023) to Peru and a two-country comparative framework—argues, based on two decades of microdata, that it is also an economic phenomenon: coca functions as a subsistence good for poor households, and its satiating effect—physiologically documented yet lacking real nutritional value (Bolton, 1976; Penny et al., 2009)—crowds out spending on actual, more expensive food. The analysis is framed within the economics of addictive consumption and temptation goods (Becker and Murphy 1988; Banerjee and Mullainathan 2010). A harmonized two-country panel was constructed (Bolivia household survey and Peru's ENAHO, 2006–2024; ˜1.13 million household-years), made comparable regarding poverty and income through relative position and PPP-adjusted lines. The empirical strategy combines a pooled probit model (participation), a two-part/double-hurdle model (intensity), and the actual reported ordinal consumption frequency—derived from expenditure modules to account for self-supply bias. Results show that coca prevalence falls monotonically with income (Bolivia: 48% → 23%; Peru: 17% → 2%), whereas alcohol consumption does not; the indigenous effect remains robust when controlling for income and education. The subsistence gradient operates at the extensive margin (who consumes) rather than the frequency margin; consumption frequency is habitual and consistent across consumers—unlike alcohol consumption, which is social and sporadic. The methodological contribution consists of a reproducible R–Stata workflow (estimation in R; validation, margins, twopm, and graphing in Stata, ensuring exact replication) and a community-contributed command (cruceandino) that generates both the table (table and collect) and the figure for a multiway cross-tabulation in a single step—designed for consumption studies using household surveys and proposed for the SSC Archive repository.

Date: 2026-10-31
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Persistent link: https://EconPapers.repec.org/RePEc:boc:spai26:11

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