||Heterogeneous Welfare Effect of Cotton Pricing on Households in Benin
Alia Didier Yélognissè ,
Floquet Anne ,
ADJOVI Epiphane ,
||African Development Review
||Since2004–2005thecottonsectorin Beninhas beenexperiencingmajorproblemsthathave causedadecline in production. To help the sector recover, the government intensiﬁed its intervention in the form of prices support. This study assessestheimpactsofsharpincreasesinproducerpricesduringtheyears2009–2012oncottonproductionandthedistributional impacts on welfare. Using a partial adjustment model of supply response, we estimate that cotton supply elasticity ranges between 1.3 and 2.6, suggesting that cotton production responds strongly to price incentives. Next, we use concepts of compensatingvariationandnetbeneﬁtratiomeasurestoanalysethewelfareimplications.We ﬁndthatanincreaseinpricefrom 190 FCFA per kg in 2009 to 250 FCFA per kg in 2012 led to a 9.8 percent increase in producers’ welfare. Non-parametric regressions showed that the increase in cotton prices likely beneﬁted all households across the entire income distribution. However, the gains are larger for rich farmers in the northern regions where cotton is predominant.
||coton, effets du prix, modele de Nerlove, Benin
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