Diversification has long been viewed as a risk minimization strategy in the face of increasing climatic and economic risks in developing countries. This paper examines the determinants of non-farm income diversification in rural Ethiopia for a four-wave panel of 1240 households from the Ethiopian Rural Household Survey over the period 1994–2009. The paper makes a conceptual distinction between non-farm and off-farm income and uses fixed and random-effects models to control for unobserved characteristics. The results suggest that the variables that determine non-farm diversification—consumption per capita and livestock holdings—belong to pull factors and reflect a strategy by wealthier households. Coupled with instrumental variable estimations to ascertain the direction of causality, these findings lend support to the argument that the main motivation for increasing non-farm diversification is likely to be accumulation.

The Determinants of Non-Farm Income Diversification in Rural Ethiopia

Weldegebriel, Zerihun Berhane;Folloni, Giuseppe;
2015

Abstract

Diversification has long been viewed as a risk minimization strategy in the face of increasing climatic and economic risks in developing countries. This paper examines the determinants of non-farm income diversification in rural Ethiopia for a four-wave panel of 1240 households from the Ethiopian Rural Household Survey over the period 1994–2009. The paper makes a conceptual distinction between non-farm and off-farm income and uses fixed and random-effects models to control for unobserved characteristics. The results suggest that the variables that determine non-farm diversification—consumption per capita and livestock holdings—belong to pull factors and reflect a strategy by wealthier households. Coupled with instrumental variable estimations to ascertain the direction of causality, these findings lend support to the argument that the main motivation for increasing non-farm diversification is likely to be accumulation.
1
Weldegebriel, Zerihun Berhane; Folloni, Giuseppe; Prowse, M.
File in questo prodotto:
File Dimensione Formato  
JPAID 6(1) 109-130, WELDEGEBRIEL, FOLLONI & PROWSE, The Determinants of Non-Farm Income Diversification in Rural Ethiopia.pdf

accesso aperto

Descrizione: Articolo basato su panel di dati di indagini su famiglie in ambiente rurale
Tipologia: Versione editoriale (Publisher’s layout)
Licenza: Creative commons
Dimensione 254.76 kB
Formato Adobe PDF
254.76 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11572/107349
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact