40 CHAPTER 3


The impact of cooperatives on output prices is intended to capture whether cooperatives effectively enable their members to obtain a higher price for their output. This indicator is fundamental, because policies promoting coopera- tives often highlight, as a rationale, the possibility that such organizations can help smallholders obtain higher prices for their output through reduced trans- action costs, increased bargaining power vis-à-vis traders, or the ability to reach more attractive markets. The price indicator that we use is an acreage- share weighted sum, over all types of cereal sold, of the difference between the price received by the member household and the corresponding average price in the sample:


PDi = Σlij × —————— × 100 , j ( –


pij – p –


pj – j )


where PDi is the price indicator for household i, lij is the proportion of land that is allocated to cereal j by household i in 2005, pij is the unit price received by household i for crop j, and p the sample households.5


j is the average unit price of crop j received by


The second indicator aims to capture whether smallholders’ participation in marketing cooperatives leads to more market-oriented behavior. We use the share of the cereal output that was sold by a household in 2005, denoted PS, and defined as:


PSi = Σ — j Qij ——, Sij


where Qij is the quantity of crop j that was produced by household i and Sij is the quantity of crop j that was sold by household i, both in 2005. If coop-


eratives are able to enhance market participation, then their impact on this indicator will be positive.


Estimators


Because the impact estimates may be sensitive to the estimator chosen, we use two separate classes of estimators to assess the robustness of our results. In the first one, we simply compute the difference in outcome between treatment and comparison households that are matched according to the


5 The aggregation process across crops is meant to capture the effects of the household’s crop production profile.


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