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The determinants and purpose of income diversification of rural households in Bangladesh

Author

Listed:
  • Sheikh Feroze Rehan
  • John Sumelius
  • Stefan Bäckman

Abstract

This study determines the factors that affect the nature and extent of household income diversification in Bangladesh. The study also investigates whether the motivation for diversification was to support asset accumulation or survival. The findings show that the extent of the diversification index is determined by household endowments of assets such as wealth, a higher number of earners, higher education, easy access to market, and better infrastructure. The motive for overall diversification was accumulation, not survival. An interesting finding was that off-farm income diversification serves a two-fold purpose. Wealthier households are attracted into off-farm self-employment to get a higher return facilitated by easy access to financial assets, and labour endowment. Credit constrained poor households are influenced by endowment in the form of education and labour to diversify into off-farm wage activities as a mean of survival. Investment in infrastructure, electrification and education does and will support income diversification in Bangladesh.

Suggested Citation

  • Sheikh Feroze Rehan & John Sumelius & Stefan Bäckman, 2019. "The determinants and purpose of income diversification of rural households in Bangladesh," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 15(3), pages 232-251.
    • Handle: RePEc:ids:ijarge:v:15:y:2019:i:3:p:232-251
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    Citations

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    Cited by:

    1. Ndubuisi Obeka Chukwu & Jude Okechukwu Chukwu, 2023. "Drivers of Households’ off-the-farm Income Diversification Patterns in Nigeria: Panel Evidence Using General Household Survey Data," Review of Development and Change, , vol. 28(1), pages 67-89, June.
    2. Saba, Saidatus & Sarker, Md. Abdur Rashid & Gow, Jeff, 2022. "Determinants of non-farm income diversification strategies and decisions of Bangladesh farm households," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 226-235.
    3. Mesquita, Daiane Felix Santiago & Nascimento, Carlos Alves do & Lima, Patrícia Veronica Pinheiro Sales, 2023. "Non-agricultural income, infrastructure and access to consumer goods in rural households in the northeast and south," Revista de Economia e Sociologia Rural (RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 61(4), January.

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