Fair Trade and Free Entry: Can a Disequilibrium Market Serve as a Development Tool?
研究公平贸易咖啡计划，发现自由进入和过度认证导致生产者收益接近零，质疑其作为发展工具的有效性。
The Fair Trade (FT) coffee initiative attempts to channel charity from consumers to poor producers via increased prices. We show that the rules of the FT system permit this rent to be eliminated due to free entry and costly excess certification of output. Using data from an association of coffee cooperatives in Central America, we verify that expected producer benefits are close to 0 when we take into account the output that is certified but not sold as FT. Our results illustrate how free entry undermines the attempt at extending charity via a price distortion in an otherwise competitive market.