Non-Traditional Export Crops in Guatemala: Short-Term Tool or Long-Term Strategy for Poverty Alleviation?

Abstract

This study is the first to document the long-term welfare effects of household non-traditional agricultural export (NTX) adoption. We use a unique panel dataset, which spans the period of 1985-2005, and employ difference-in-differences estimation to investigate the long-term impact of NTX adoption on changes in household consumption status and asset position in Santiago Sacatepéquez municipality of Guatemala. Given the heterogeneity in adoption patterns, we differentiate the impact estimates based on a classification of households that takes into account the timing and duration of NTX adoption. Our results show that while, on average, welfare levels have improved for all households irrespective of adoption status and duration, the extent of improvement varied across groups, with long-term adopters exhibiting the smallest increase in the lapse of two decades, in spite of some early gains. Conversely, early adopters who withdrew from NTX production after reaping the benefits of the boom period of the 1980s are found to have fared better and shown greater improvements in durable asset position and housing conditions than any other category.Smallholders, Non-Traditional Export Crops, Long-Term Welfare Effects, Consumer/Household Economics, International Relations/Trade,