Using cross-sectional farm household data collected in the
Vietnamese pangasius sector in 2011, we estimate the impact
of food standards on farmers’ wellbeing, measured by consumption
expenditure per adult equivalent. The impact of
standards is estimated at the mean and at selected quantile levels.
Because the adoption of food standards is partly determined
by farm specific unobservable factors that also
influence consumption we use instrumental variable regressions
to estimate the causal effect of food standard adoption.
Our results show that the additional effort in terms of modified
production practices and use of improved inputs pays off
for the applicants of standards as we find a positive overall impact
of standards on farmers’ wellbeing. Thus, on average, one
should expect pangasius farms that apply standards to be better
off than comparable farms with traditional production.
This suggests not only that investment in food standards is
necessary in modern value chains, but also that this investment
can lead to subsequent financial gains. However, the impact of
standards on farmers’ wellbeing is heterogeneous. We find that
only households at higher levels in the expenditure distribution