Market-oriented food production and welfare improvement: Causal evidence from rural households in Mali

This study examines the causal impact of market-oriented food production on poverty reduction among rural households in Mali using nationally representative survey data. Employing endogenous switching regression to address selection bias, we analyze differential welfare effects of market-oriented versus self-production strategies across multiple poverty dimensions. Market-oriented households experience an 11.6 percentage point reduction in monetary poverty and 12.5 % increase in consumption per capita relative to their counterfactual outcomes under self-production. Multidimensional poverty impacts are modest (3.2 percentage points), suggesting market engagement alone is insufficient for comprehensive human development in fragile contexts. Importantly, treatment effects on the untreated indicate substantial unrealized potential. Self-production households could hypothetically experience a 17 percentage point reduction in monetary poverty if they adopted market orientation. Infrastructure availability, education, and household characteristics emerge as key determinants of market participation and welfare outcomes. Robustness checks using propensity score matching confirms these findings. Overall, the study highlights that while market-oriented strategies offer significant poverty reduction potential in post-conflict settings, complementary interventions in education, health, and infrastructure are necessary to maximize welfare gains and address multidimensional poverty comprehensively. • Market-oriented food production reduces poverty in Mali. • Market farmers see 11.6% less poverty and 12.5% more consumption than subsistence farmers. • ESR and PSM methods used to eliminate selection bias and validate results robustly. • Multidimensional poverty drops only 3.2%, showing markets alone can't solve all welfare issues. • Policies must add infrastructure, education, and services to maximize commercialization benefits.