Engel Curves for Fair Trade Consumption and Development Perspectives for Producers: Evidence from Data on Real Fairtrade Purchases

Abstract

While Fairtrade sales have exhibited two-digit growth rates over recent decades, their capacity to become large enough to generate substantial gains for producers is still uncertain. Estimating Fairtrade Engel curves based on real purchases, this article describes how Fairtrade consumption varies with consumer characteristics and total income. Results show high expenditure elasticities for Fairtrade demand, and suggest that market expansion lies in the growth of income per capita in import countries and in an increase in the diversity, availability, and quality of products. Implications for producers are drawn from the results.