Reading Tealeaves on the Potential Impact of the Privatization of Tea Estates in Rwanda

The Poverty Reduction Strategy of the
Government of Rwanda seeks to unlock the growth and poverty
reduction potential of the tea sector through the
privatization of tea estates. This paper uses the logic of
causal inference and data from the 2004 Quantitative
Baseline Survey of the tea sector to assess the potential
impact of the privatization program. This entails a
normalized comparison of productivity outcomes to account
for household heterogeneity in terms of observable and
non-observable determinants of these outcomes. The paper
also compares living standards between tea and non-tea
households. Three main findings emerge from the analysis.
Productivity outcomes are generally better in the private
sector than in the public sector. Male-headed households
outperform female-headed households along all dimensions
considered here. And tea households tend to be better off
than non-tea households.