Working Paper BETA #2017-24

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Title : Determinants of the Adoption of Organic Tea Production in Northern Vietnam: A Robustness Analysis

Author(s) : Nicolas Lampach, Phu Nguyen-Van, Nguyen To-The

Abstract : Increasing consumer awareness on sustainable and healthy food choices gave rise to a growing demand for organic tea in the past decades. Most of this demand is met by imports from developing countries. This article examines the main factors affecting the choice of farm households to adopt organic tea production in Northern Vietnam. We apply a logit model to survey data on 241 Vietnamese tea farming households. We assess the robustness of the results by addressing three important statistical issues: (i) regressor endogeneity, (ii) unobserved heterogeneity at farm level and (iii) missing values. The main results are chiefly robust and largely in line with the theoretical predictions. We find that farm households with higher revenues and located in rich natural and physical environments are significantly more inclined to adopt organic tea production. Furthermore, the analysis reveals that farm households being consulted by extension agents and belonging to a tea association increase the odds for the adoption of organic tea cultivation.

Key-words : Organic farming; Regressor endogeneity; Unobserved heterogeneity; Multiple imputations method; Tea production; Vietnam

JEL Classification : Q15; O33; Q18