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Essays in Development Economics: The Health and Economic Impact of the Farm-gate Cocoa Price Boom in Ghana

  • Author / Creator
    Akude, Philip J
  • This thesis explores the impact of Ghana’s farm-gate cocoa price shocks on welfare. It comprises of two essays.

    The first essay examines the impact of a farm-gate cocoa price boom on child health, where the price boom directly affects household incomes and indirectly affect the investments in child health-promoting goods and activities. Ghana experienced an exogenous boom in farm-gate cocoa prices in the early 1990s. The agro-ecological properties of Ghana yield sharp comparisons across districts, making the southern parts of Ghana, the only areas that receive sufficient amount of rain for cocoa production. I identify the effects of the cocoa price boom by comparing child health outcomes in cocoa, producing districts to other non-cocoa producing districts during pre and post price boom periods. The evidence suggests that the cocoa price boom led to a differential increase in the probability of stunting and underweight in children living in cocoa districts relative to those in non-cocoa districts. Next, I explore the mechanisms through which a cocoa price increase affects child health and find that there is a differential increase in the probability of stunting and underweight for children in cocoa districts because the income effect derived from the price boom fails to exceed the substitution effect that results in declines in antenatal visits, breastfeeding, and vaccinations against diseases.

    The second essay investigates the impact of Ghana’s farm-gate cocoa price increase between 1998/1999 and 2012/2013 on the welfare of residents living in cocoa areas of Ghana. Over the study period, real farm-gate cocoa prices in Ghana increased over 50%, raising questions on whether these gains had any meaningful impact on inequality and on policymakers’ attempts to alleviate poverty among residents in cocoa areas. I identify the impacts of the cocoa price boom by comparing poverty and inequality in wage and consumption of households in cocoa producing districts to those of non-cocoa districts during the price boom periods. The overall impact of the farm-gate cocoa price boom led to an increase in the differential change in wage and consumption of households by about 20% to 71% and 8% to 11% points, respectively. It also led to a differential decline in wage and consumption inequality by about 37% to 60% and 16% to 40% points respectively. Further, there was a 7% points decline in the poverty headcount ratio for households in cocoa districts compared to those in non-cocoa districts, and the cocoa price boom resulted in a decline in the intensity of poverty. I find that there was a differential decline in the poverty gap ratio by about 4% points for households in cocoa districts relative to those in non-cocoa districts. Finally, I find evidence to suggest that both landless and landowning households at the bottom half of the wage and consumption distribution benefited from the gains of the price boom compared to those at the top half. However, landowning households were the higher beneficiaries of the price boom compared to the landless households.

  • Subjects / Keywords
  • Graduation date
    Spring 2020
  • Type of Item
    Thesis
  • Degree
    Doctor of Philosophy
  • DOI
    https://doi.org/10.7939/r3-2rb5-5m86
  • License
    Permission is hereby granted to the University of Alberta Libraries to reproduce single copies of this thesis and to lend or sell such copies for private, scholarly or scientific research purposes only. Where the thesis is converted to, or otherwise made available in digital form, the University of Alberta will advise potential users of the thesis of these terms. The author reserves all other publication and other rights in association with the copyright in the thesis and, except as herein before provided, neither the thesis nor any substantial portion thereof may be printed or otherwise reproduced in any material form whatsoever without the author's prior written permission.