Quantitative Analysis of the Impacts of Fair Trade

Several impact studies have tried to verify whether fair trade maintains its promises. Most papers are case studies which try to do so by either comparing FT and non FT-affiliated on various performance indicators or by looking at the impact of affiliation years on younger and older FT producers. These studies generally show positive and significant effects of affiliation years on objective (e.g. income and food consumption) and subjective (life satisfaction and self-esteem) wellbeing indicators with some important qualifications. An interesting case is the (indirect) impact on child labour: fair trade raises parental income and their vulnerability to economic shocks which are a well-known determinant of children school dropout. At the same time the birth of not for profit fair trade producers “retailing public goods” – which are bought by socially responsible consumers – has led to a partial imitative reaction of profit maximising (non-FT) new entrants, thereby producing contagion and transforming social responsibility into a competitive variable. This implies opportunities for producers in developing countries but also threats, since the higher the number of firms trading the goods in Western countries, the higher the risk of opportunistic behaviours with negative effects on the collective reputation built over time by the first – and more intrinsically motivated – members.