Welfare effects of vegetable commercialization: Evidence from smallholder producers in Kenya

We investigate whether smallholder horticultural commercialization is able to, as often stipulated, reduce poverty in developing countries with the help of panel household survey data from Kenya. We find evidence for a positive association between vegetable commercialization and household welfare, even when controlling for unobserved heterogeneity across households. Interestingly, the effect differs depending on which market vegetables are being produced for: commercialization through the export market is consistently positively associated with income but not wealth, while there is some limited evidence for commercialization through the domestic market channel being positively related to welfare measured by asset holdings and income, depending on the specification.