Do cooperatives bene t the poor? Evidence from Ethiopia

This paper analyzes how producer cooperatives may bene t households in rural environments. In particular, it explores if cooperatives help poor households to exit poverty through three mechanisms: increases in prices, total factor productivity, and relaxation of credit constraints. In a multi-period model I characterize the conditions that must hold so that the always poor can exit poverty when participating in cooperatives. I test the implications of the model using the Ethiopian Rural Household Surveys (ERHS) from 1997, 1999, 2004 and 2009. Preliminary results indicate that although cooperatives have a positive impact increasing household's productivity, they have a negative e ect on the access to higher technologies.