A Survey of the Economics of Fair Trade

Ana Dammert and Sarah Mohan ()
Additional contact information
Sarah Mohan: Carleton University

No 8167, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Fair Trade has spread in developing countries as an initiative aimed at lifting poor smallholder farmers out of poverty by providing them with premium prices, availability of credit, and improved community development and social goods. Fair Trade is also viewed as a niche market for high value products in a context of globalization and trade liberalization policies that affect smallholder farmers in developing countries. The question of whether Fair Trade affects the welfare of rural farmers, however, is particularly contentious. This paper provides a review of the Fair Trade literature, both theoretical and empirical, with a specific focus on the analysis of small-scale producer's welfare in developing countries. Our review shows that while most empirical papers have focused on the impacts of Fair Trade on prices and income, our review highlights the importance of limited market access and changes in productivity. Likewise, little is known about the impacts of Fair Trade on labor markets and human capital investments. Persistent methodological challenges make it challenging, however, to assess the causal impact of this certification and labelling initiative.

Keywords: developing countries; market efficiency; Fair Trade (search for similar items in EconPapers)
JEL-codes: O19 P46 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-05
New Economics Papers: this item is included in nep-agr and nep-int
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Citations: View citations in EconPapers (2)

Published - published in: Journal of Economic Surveys, 2015, 29(5), 855-868

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Related works:
Journal Article: A SURVEY OF THE ECONOMICS OF FAIR TRADE (2015)
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