Lessons from Long-Run (1975–2017) Structural Change in Colombia’S Coffee Production
Saenz M, Alvarez D, Brock G (2021). Lessons from long-run (1975–2017) structural change in Colombia’s coffee production. Agricultural and Resource Economics Review , 50(2), pp. 201-225
Posted: 14 Apr 2021 Last revised: 30 Jul 2021
Date Written: March 31, 2021
Abstract
Although coffee is still an important agricultural commodity in Colombia, the coffee share of GDP has significantly declined over the past 40 years. Controlling for changes in relative prices, factor endowments, and technological change, we analyze the coffee share decline in conjunction with other agricultural output by applying a Vector Error Correction model. The results indicate that while market liberalization policies contributed to the declining coffee share of GDP, the decline was partly offset by the end of coffee export quotas. Our results support policies in favor of assistance for farmers to compete in international markets.
Keywords: coffee share, Colombia, GDP function, structural change, VECM
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