Fair Trade in the Fields of Florida: The Impact of the Penny-Per-Pound on Tomato Pickers

Hyejin Ku ()
Additional contact information
Hyejin Ku: University College London

No 1416, RF Berlin - CReAM Discussion Paper Series from Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM)

Abstract: Despite the enduring appeal of fair trade activism, little evidence exists on its effectiveness in improving producer welfare. This paper provides evidence on the direct effects of a fair trade premium on its target beneficiaries, using the case of the Penny-Per-Pound, a program that increased the piece-rate wages received by tomato pickers in Florida. It highlights that in output-constraint settings, common in agriculture, a piece-rate compensation scheme can result in externalities among workers. By inadvertently incentivizing the workers to increase their effort whereas the total output is fixed, the program amplified the externality and generated unforeseen risks for worker displacement.

Keywords: consumer activism; price premium; capacity constraint; natural experiment (search for similar items in EconPapers)
JEL-codes: J88 M52 O13 (search for similar items in EconPapers)
Date: 2014-05
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cream-migration.org/publ_uploads/CDP_16_14.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:crm:wpaper:1416

Access Statistics for this paper

More papers in RF Berlin - CReAM Discussion Paper Series from Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM) Contact information at EDIRC.
Bibliographic data for series maintained by CReAM Administrator () and Matthew Nibloe ().