The economics of Fair Trade: dealing with some criticisms Mark Hayes Senior Research Fellow in Economics Homerton College, Cambridge

The arguments of the critics second-best alternative to aid

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The arguments of the critics second-best alternative to aid imposes losses on non-Fair Trade producers

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Key analytical ideas so far Direct impact: underemployment Indirect impact: elasticity of demand

The arguments of the critics second-best alternative to aid imposes losses on non-Fair Trade producers prolongs unsustainable dependence

Key analytical ideas so far Direct impact: underemployment Indirect impact: elasticity of demand Dependence: the nature of the household investment decision Hayes, M. G. (2006). On the efficiency of Fair Trade. Review of Social Economy, 44(4), 447–68. Hayes, M. G. (2008). A comment on the economics of Fair Trade. World Development, 36 (12),

The arguments of the critics second-best alternative to aid imposes losses on non-Fair Trade producers prolongs unsustainable dependence can never be more than a niche

Four key analytical ideas to counter the four criticisms Direct impact: underemployment Indirect impact: elasticity of demand Dependence: the nature of the household investment decision Scale up: Fair Trade embodies principles similar to those needed to reform the international monetary and trading system.