The Journal of Economic Inequality

, Volume 14, Issue 1, pp 81–108 | Cite as

Middlemen, fair traders, and poverty

Article

Abstract

We propose a spatial model of producer market access where local middlemen reap market power due to match friction, and fair traders enter to present an alternative. The model features location as a key determinant of the impact of fair trader entry on the market share of fair traders, the distribution of consumer willingness to pay between middlemen and producers, and intra- / inter-regional poverty incidence. For governments who wish to minimize the poverty gap, our results support directing resources to subsidize fair trade organizations, and/or to producers with no access to markets, rather than to local middlemen intermediaries.

Keywords

Middlemen Fair traders Poverty Market access 

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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Charles H. Dyson School of Applied Economics and ManagementCornell UniversityIthacaUSA
  2. 2.Graduate School of International RelationsInternational University of JapanNiigataJapan
  3. 3.Charles H. Dyson School of Applied Economics and Management and Department of EconomicsCornell UniversityIthacaUSA

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