Summary
This study compares the profitability of organic and conventional production using microdata from the 2006 Agriculture Census of approximately 4.2 million Brazilian family farms. Building on the conflicting results of other comparative studies that have generally not accounted for omitted variable bias, the authors use propensity score matching and the methodology developed by Oster (forthcoming) in an effort to account for selection based on unobservables. The results show that the profits of organic producers are lower than those of conventional producers, however the authors note that expansion of organic agriculture could generate wider benefits to health and environment in Brazil through reduction in pesticides.