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Impact of non-farm income on welfare in rural Bangladesh: Multilevel mixed-effects regression approach

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  • Al-Amin, A.K.M. Abdullah
  • Hossain, M.J.

Abstract

This study uses a two-stage econometric framework based on multilevel mixed-effects linear regression model with nationally representative Household Income Expenditure Survey (HIES) data in 2010 to investigate the effects of non-farm income on asset ownership of rural Bangladeshi households. Result reveals that non-farm income has a significant positive effect on household’s asset ownership. This study also uses Horvitz-Thompson (HT) estimator of the Foster, Greer and Thorbecke (FGT) indices and Gini, Theil’s and Atkinson income inequality measures to examine the impact of non-farm income on poverty and income distribution. The poverty measures reveal that the inclusion of non-farm income reduces the level, depth and severity of poverty as well as poverty risk at division level and in rural Bangladesh. However, non-farm income increased income inequality among rural households. As the agriculture of Bangladesh is subsistence and semi-commercial in nature, it is essential to encourage non-farm income activities to accelerate well-being among rural agricultural households.

Suggested Citation

  • Al-Amin, A.K.M. Abdullah & Hossain, M.J., 2019. "Impact of non-farm income on welfare in rural Bangladesh: Multilevel mixed-effects regression approach," World Development Perspectives, Elsevier, vol. 13(C), pages 95-102.
    • Handle: RePEc:eee:wodepe:v:13:y:2019:i:c:p:95-102
    DOI: 10.1016/j.wdp.2019.02.014
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