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

Ana Ibáñez (), Juan Muñoz Mora () and Philip Verwimp ()

Documentos CEDE from Universidad de los Andes - CEDE

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.

Keywords: selection model; armed conflict; and agricultural production (search for similar items in EconPapers)
JEL-codes: C21 C34 D13 D74 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-lam
Date: 2013-08-07
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http://economia.uniandes.edu.co/publicaciones/dcede2013-35.pdf

Related works:
Working Paper: Abandoning Coffee under the Threat of Violence and the Presence of Illicit Crops. Evidence from Colombia (2013) Downloads
Working Paper: Abandoning Coffee under the Threat of Violence and the Presence of Illicit Crops. Evidence from Colombia (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:011465

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