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Rural livestock asset portfolio in northern Ethiopia: A microeconomic analysis of choice and accumulation

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  • Tegebu, Fredu Nega
  • Mathijs, Erik
  • Deckers, Jozef A.
  • Tollens, Eric

Abstract

Livestock of different species fulfill different functions. Depending on their livelihood strategies, households differ in their choice of type of animal to keep and accumulation of the chosen animal overtime. This paper investigates the dynamic behavior of rural households’ livestock holding to identify determinants of choice of type of animal households’ keep and accumulation of the chosen animals using a panel data of 385 rural households in a mixed farming system in northern Ethiopia. Dynamic behavior of choice is analyzed for a principal animal, an animal that constitutes the largest value of livestock assets a household possesses, using a multinomial logit model. A household that keeps oxen as a principal animal is considered the reference household. Results indicate that households differ in choice of type of animal they keep. Agro climatic conditions, sex and age of household head, the presence or absence of male household members and liquidity are the significant factors that determine type of principal animal households keep. Conditional on the principal animal selected, we have analyzed the factors that determine the accumulation of the chosen animals by correcting for selection bias. Size of land cultivated is the most significant factor that explains the size of animals households keep. Other factors include sex of household head, diversification into non-farm self employment and shocks.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 50039.

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Date of creation: 2009
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Handle: RePEc:ags:iaae09:50039

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Keywords: Livestock asset portfolio; choice; accumulation; principal animal; northern Ethiopia; Consumer/Household Economics;

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  1. François Bourguignon & Martin Fournier & Marc Gurgand, 2004. "Selection Bias Corrections Based on the Multinomial Logit Model: Monte-Carlo Comparisons," DELTA Working Papers 2004-20, DELTA (Ecole normale supérieure).
  2. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
  3. Bellemare, Marc F. & Barrett, Christopher B. & Osterloh, Sharon M., 2005. "Household-Level Livestock Marketing Behavior Among Northern Kenyan and Southern Ethiopian Pastoralists," Working Papers 14749, Cornell University, Department of Applied Economics and Management.
  4. Alberto Zezza & Paul Winters & Benjamin Davis & Gero Carletto & Katia Covarrubias & Esteban Quinones & Kostas Stamoulis & Takis Karfakis & Luca Tasciotti & Stefania DiGiuseppe & Genny Bonomi, 2007. "Rural Household Access to Assets and Agrarian Institutions; A Cross Country Comparison," Working Papers 07-17, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  5. Tom Bundervoet, 2006. "Livestock, Activity Choices and Conflict: Evidence from Burundi," HiCN Working Papers 24, Households in Conflict Network.
  6. Woldenhanna, T. & Oskam, A., 2001. "Income diversification and entry barriers: evidence from the Tigray region of northern Ethiopia," Food Policy, Elsevier, vol. 26(4), pages 351-365, August.
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