Export Taxes and Consumption: Evidence from Cote d'Ivoire's De Facto Partition

摘要

I exploit the emergence of two de facto states in Cote d'Ivoire during the 2002-11 political crisis to examine the effects of an export tax reduction for cocoa beans on the living standards of farming households. Combining both spatial and temporal variations in exposure to a set of dichotomous export tax policies, I find that farmers in low export tax districts significantly increased their consumption expenditures relative to farmers in high tax districts. I also provide evidence that the transmission of border prices to local farmers is a relevant mechanism through which the reduction of trade barriers enhances cocoa farmers' living standards.