Big fish in thin markets: Competing with the middlemen to increase market access in the Amazon

Viva Ona Bartkus, Wyatt Brooks, Joseph P. Kaboski, Carolyn Pelnik

Research output: Contribution to journalArticlepeer-review

Abstract

Middlemen are ubiquitous in supply chains. In developing countries they help bring products from remote communities to end markets but may exert strong market power. We study a cooperative intervention which organizes together poor fishing communities in the Amazon — one of the poorest and most remote regions of the world — to purchase large boats in order to partially bypass middlemen and deliver their fish directly to market. We find that the intervention increases income by 27%, largely through an increase in price received, and also increases consumption. Moreover, the intervention is highly cost effective with the projected stream of income gains easily covering the cost of the investment. Finally, we formalize a model in which the market power of middlemen itself can create a poverty trap, which can be eliminated with cooperative investment.

Original languageEnglish (US)
Article number102757
JournalJournal of Development Economics
Volume155
DOIs
StatePublished - Mar 2022
Externally publishedYes

Keywords

  • Collective investment
  • Monopsony
  • Poverty trap
  • Rural development

ASJC Scopus subject areas

  • Development
  • Economics and Econometrics

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