Export Commodity Dependence and Vulnerability to Poverty

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In this paper we explore the link between commodity dependence and vulnerability to
poverty in rural Tanzania with a particular focus on coffee-growing households. Even if the
vulnerability rate is quite high in rural Tanzania, our results show, on average, that coffee
growers have a lower probability of being poor and vulnerable compared to non-growers.
However, when coffee growers are disaggregated into small and large, we see that the result
is mainly driven by large coffee growers. For small coffee growers, on the other hand,
we do not find evidence to suggest that they are different from non-growers in terms of
both poverty and vulnerability. When we disaggregate vulnerability into its components,
poverty-induced vs risk-induced vulnerability, we find coffee growers to have a relatively
higher probability of facing risk-induced vulnerability compared to non-growers. There
are, however, heterogeneities in terms of the size of coffee growers. In particular, relative to
non-growers, small coffee growers have a relatively higher probability of facing risk-induced
vulnerability. On the other hand, conditional on being vulnerable, large coffee growers do
not appear to have a statistically significant difference in their probability of facing a risk-
induced vulnerability compared to non-coffee growers. These results indicate not only the
need for vulnerability-reducing policies but also the importance of identifying the source of
vulnerability as the choice of the right type of policy intervention depends on understanding
the causes of vulnerability.
Original languageEnglish
Place of PublicationCopenhagen
PublisherDERG, Department of Economics, University of Copenhagen
Edition14
Volume2022
Publication statusPublished - 2022
SeriesDERG Working Paper Series
Number14
Volume2022

ID: 311610478