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Keywords:

  • C23;
  • I31;
  • O12;
  • Q13
  • Smallholders;
  • Nontraditional export crops;
  • Long-term welfare effects

Abstract

This article documents the long-term welfare effects of household nontraditional agricultural export (NTX) adoption. We use a panel dataset that spans the period 1985–2005, and employ difference-in-differences estimation to investigate the long-term impact of nontraditional agricultural export adoption on changes in household consumption status and asset position in the Central Highlands of Guatemala. Given the heterogeneity in adoption patterns, the analysis differentiates the impact estimates based on a classification of households that takes into account the timing and duration of nontraditional agricultural export adoption. The results show that while, on average, welfare levels have improved for all households irrespective of adoption status and duration, the extent of improvement has varied across groups. Long-term adopters exhibit the smallest increase in the lapse of two decades, in spite of some early gains. Conversely, early adopters who withdrew from nontraditional agricultural export 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.