Does Food Aid Disrupt Local Food Market? Evidence from Rural Ethiopia

The paper examines the impact of food aid on households' marketing behavior, based on a panel of households followed during 1994-2009 in 15 villages of Ethiopia. The impact of aid is examined at the intensive margin (on quantities produced, sold or bought by the households) and at the extensive margin (on the number of producers, sellers and buyers). Food aid reduces the probability of being a producer. It also increases the probability of being a seller after a reform of aid policy in 2004 from “repeated emergency distributions” toward a multi-year program aiming at agricultural development.