Why do subsistence-level people join the market economy? Testing hypotheses of push and pull determinants in Bolivian Amazonia

Why would subsistence-level indigenous people join the market economy? The question matters because, in answering it, one contributes to a venerable debate about the effects of markets on well-being. Anthropologists have generally treated market participation as exogenous. Market participation is in fact endogenous if it reflects choice. We review hypotheses of determinants that push or pull people to the market, including resource scarcity from population pressure and encroachment, desire to increase level of and reduce variability in food consumption, and the allure of foreign goods. To test the hypotheses we use different series of panel data from Tsimane' Amerindians, aforaging-horticultural society in the Bolivian Amazon. We correct for the endogeneity of market participation by using outside traveling traders as an instrumental variable for market participation. We find no support for push determinants and mixed support for the allure of foreign goods. We find no evidence that markets raise nutritional status, but they do seem to reduce its variability.