Globalization, Crop Choice, and Property Rights in Rural Peru, 1994–2004

Alfred J. Field and Erica Field

in The Poor under Globalization in Asia, Latin America, and Africa

Published in print May 2010 | ISBN: 9780199584758
Published online September 2010 | e-ISBN: 9780191594533 | DOI:

Series: WIDER Studies in Development Economics

Globalization, Crop Choice, and Property Rights in Rural Peru, 1994–2004

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This chapter describes the results of initial work analysing a panel of rural households in Peru between 1994 and 2004 to determine household responses to changes in relative prices of traditional versus export‐oriented products. Our principal interest was better to understand how household responses to external economic shocks influenced rural welfare, income distribution, and poverty. Since a large percentage of Peruvians living in poverty are located in rural areas, learning more about how these households respond to a changing external environment provides insights into the factors that influence their ability to improve their absolute and relative economic position. The results of our analysis indicate that changes in relative prices had a significant impact on the adoption of new agricultural products, and the magnitude of response was mitigated by households' degree of tenure security and access to regional and local markets. Analyses of household expenditures over the period indicate that those who adopted export crops experienced a significant growth in consumption proportional to the change in acreage devoted to exportable products, and were less likely to be classified as impoverished at the end of the period. Instrumental variables estimates suggest that this association is causal.

Keywords: agricultural households; household decision‐making; income distribution; international trade; micro‐economics; poverty; property rights; structural adjustment; technology adoption

Chapter.  13350 words.  Illustrated.

Subjects: Economic Development and Growth

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