Middlemen, Non-Profits and Poverty

40 Pages Posted: 7 Oct 2009

See all articles by Nancy H. Chau

Nancy H. Chau

Cornell University - School of Applied Economics and Management; IZA Institute of Labor Economics

Hideaki Goto

International University of Japan - Graduate School of International Relations

Ravi Kanbur

Cornell University; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 2009

Abstract

In many markets in developing countries, especially in remote areas, middlemen are thought to earn excessive profits. Non-profits come in to counter what is seen as middlemen's market power, and rich country consumers pay a 'fair-trade' premium for products marketed by such non-profits. This paper provides answers to the following five questions. How exactly do middlemen and non-profits divide up the market? How do the price mark up and price pass-through differ between middleman and non-profits? What is the impact of non-profits entry on the wellbeing of the poor? Should the government subsidize the entry of non-profits, or the entry of middlemen? Should wealthy consumers in the North pay a premium for fair trade products, or should they support fair trade non-profits directly?

Keywords: market access, middlemen, non-profits, poverty

JEL Classification: F15, I32

Suggested Citation

Chau, Nancy H. and Goto, Hideaki and Kanbur, Ravi, Middlemen, Non-Profits and Poverty (September 2009). CEPR Discussion Paper No. DP7459. Available at SSRN: https://ssrn.com/abstract=1484492

Nancy H. Chau (Contact Author)

Cornell University - School of Applied Economics and Management ( email )

Ithaca, NY 14853
United States
607-255-4463 (Phone)
607-255-9984 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Hideaki Goto

International University of Japan - Graduate School of International Relations ( email )

777 Kokusai-Cho
Minami Uonuma Shi, Niigata-ken 949-7277
Japan

Ravi Kanbur

Cornell University ( email )

301-J Warren Hall
Ithaca, NY 14853
United States
607-255-7966 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://www.kanbur.dyson.cornell.edu

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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