Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 534: Trade and Resources: Welfare effects of the Lake Victoria fisheries boom

Håkan Eggert (), Mads Greaker () and Asmerom Kidane ()
Additional contact information
Håkan Eggert: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG, Sweden
Mads Greaker: Statistics Norway, Postal: Oslo, Norway
Asmerom Kidane: University of Dar-es-Salaam, Postal: Dar-es-Salaam, Tanzania

Abstract: In this paper we examine the welfare implications of the Tanzanian fisheries boom following from the increase in quantities and prices of the Lake Victoria Nile perch export during 1993-2008. We use the theoretical model by Brander and Taylor (1997) that we try to test empirically. We have a micro level perspective using data from a 1993 World Bank household survey and our own study from 2008, both containing data from about 520 households in the two regions Mwanza and Mara by the lake. Our results indicate that average income has increased in both rural and urban areas. For the poorest part of the population, rural areas experienced only modestly and non-significantly reductions in the fraction below basic needs, while urban areas had a substantial reduction. However, growth was modest and inequality seems to have increased during the period. Concerning human capital measured as education for the household head we found substantial improvements in educational level and a simple regression model confirmed the significant impact of education on household income. We also found that households on average are better off when situated close to the lake.

Keywords: international fish trade; Lake Victoria; Nile perch; poverty reduction; Tanzania

JEL-codes: F18; Q02; Q22; Q56

30 pages, June 4, 2012

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