The Economic Impact of Marena’s Investments on Sustainable Agricultural Systems in Honduras

Authors

  • Boris E. Bravo-Ureta,

  • Alexandre Nunes Almeida,

  • Daniel Solís,

  • Aarón Inestroza

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    • Boris E. Bravo-Ureta is Professor of Agricultural and Resource Economics (ARE) at the University of Connecticut (UConn) and Adjunct Professor of Agricultural Economics at the University of Talca, Talca, Chile. E-mail: boris.bravoureta@uconn.edu for correspondence. Alexandre Nunes Almeida was a Research Associate in ARE at UConn when this article was written. Daniel Solís is an Assistant Scientist in the Division of Marine Affairs and Policy, Rosenstiel School of Marine and Atmospheric Science, at the University of Miami, Miami, FL, USA. Aarón Inestroza is associated with the MARENA Project, Ministry of Agriculture, Honduras. The authors acknowledge the helpful comments received from two anonymous reviewers and from Paul Winters. They are also very thankful for all the support provided by Ricardo Quiroga (IADB) and the MARENA Team in Honduras during the initial study.


Abstract

This study examines the economic impact of sustainable agricultural production systems in Central America. In particular, we investigate the impact of investments promoted by the MARENA Programme in Honduras on the total value of agricultural production (TVAP) of its beneficiaries. Propensity Score Matching techniques along with the Difference-in-Differences framework are used to mitigate biases stemming from differences in observed as well as unobserved (time-invariant) characteristics between beneficiaries and a control group. The econometric estimates suggest that MARENA has had a positive and significant effect on the TVAP of beneficiaries. In addition, the analysis shows that, under alternative scenarios, MARENA yielded higher than expected internal rates of return. The results of this study shed light on the response of small-scale hillside farmers to economic incentives and lend support to the role of natural resource management projects in Central America as a tool to increase household income while also promoting the conservation of natural resources.

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