44 CHAPTER 3
members, we use the number of hectares of farm land “owned” by the household as a proxy for its actual level of production. Given the land own- ership regime in Ethiopia, this variable is considered as exogenous, at least in the short or medium term.6 Other variables in the estimation include the household head’s reading ability, household size, and the set of kebele-level control variables used in the definition of the development domains. The sample is the same as that used in the estimates reported in panel A of Table 3.7, except that a few observations with missing data were dropped. Estima- tors used are the ordinary least squares and tobit specifications described above.
Coefficients in the upper part of Table 3.8 indicate that households living close to markets sell more of their production and at higher prices, whereas the opposite is true for households living in areas with higher population densities. Favorable agroclimatic conditions (that is, areas that produce sur- pluses) tend to have depressing effects on prices. From among the household- level characteristics, the amount of land owned positively affects the share of production that is commercialized by a household, and the education of the household head has a clear and significant effect on the price he or she is able to obtain for a unit of output. In the middle part of the table, we report the coefficients on a membership dummy (“Treatment ×”). Coop- erative membership does have a significant positive impact on output price, similar in magnitude to the results presented in Table 3.7. In contrast, the effect on the share of production sold cannot be distinguished from zero, further supporting the conclusions of the previous table. Overall, the robustness and representativeness checks support the general conclusion that, although cooperatives may provide significantly higher prices to their members, the average impact on fraction of output marketed is not statistically different from zero. However, these estimates capture average outcomes and do not capture potentially important heterogeneities across farmers’ responses to their participation in cooperatives.
Heterogeneous Impact There is no reason to believe a priori that membership in a cooperative implies homogenous responses for different categories of farmers. To see this, we plot in Figure 3.3 the distribution of the impact that cooperatives have on
6 Land in Ethiopia is the property of the state and cannot be owned by individual farmers. Never- theless, land is allocated to households on a usufructuary basis for an undetermined period. Although land cannot be sold, it can be rented out and eventually passed on to heirs. The vari- able we use here as “landholding” is the amount of land allocated by the state to the house- hold. For a detailed description of the Ethiopian land-tenure system, see Gebreselassie (2006).
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