Smuggling and Supply Response: Coffee in Ethiopia.
During the 1980s substantial smuggling of coffee has been taking place in Ethiopia. The recent devaluation has raised hopes that substantial quantities of coffee will flow back to the official channels. In this study data on the incentives to supply to the different channels are collated. A model of official supplies is formulated which nests an empirical test between the smuggling models by Bhagwati and Hansen (1973) and by Pitt (1981). The econometric results favor the latter, and show a sm...Expand abstract
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