Abstract

Evidence is very scanty in Africa on the welfare effects of the recent shift of the horticulture industry from involving poor households through outgrower arrangements towards employing them in consolidated production entities. This study determines the impact of large-scale export vegetable production on the welfare of the employees in Zambia. It uses data from a survey of a random sample of farm worker households and comparison households in nine villages around one of the four largest estate vegetable farms in Zambia. Evidence from control function, propensity score matching, and odds-weighted regression models suggest huge and significant welfare effects as measured by per capita consumption expenditure. Estimated at 44 and 45% for non-food and food expenditure, respectively, the impact is not affected by the households' initial wealth in any statistically significant manner. This means that the recent industry changes might need to be supported and better understood, as opposed to being admonished.

Key words: Zambia, labor, welfare, consumption, propensity score.