Is household income diversification a means of survival or a means of accumulation? Panel data evidence from Tanzania
AbstractWhat drives income diversification among rural households in developing countries? A large literature has examined whether household income diversification is a means of survival or a means of accumulation, which has so far remained inconclusive. This paper attempts to evaluate which explanation of household income diversification – diversification as survival or diversification as accumulation – stands up to empirical scrutiny. We use household panel data from Tanzania of approximately 800 households for four years and use fixed and random effects models to sweep out unobserved households’ attitudes to risk that may be correlated with household income diversification behaviour. We also use instrumental variable methods to address the possibility of reverse causality and that the household’s income status may be endogenous to its diversification behaviour. Our results suggest that the ‘diversification as accumulation’ motive of household income diversification seems to have stronger empirical validity in the Tanzanian context.
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Bibliographic InfoPaper provided by BWPI, The University of Manchester in its series Brooks World Poverty Institute Working Paper Series with number 12210.
Date of creation: 2010
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- Joachim De Weerdt, 2010. "Moving out of Poverty in Tanzania: Evidence from Kagera," The Journal of Development Studies, Taylor and Francis Journals, vol. 46(2), pages 331-349.
- Ira Gang & Kunal Sen & Myeong-Su Yun, 2011.
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- Ira Gang & Kunal Sen & Myeong-Su Yun, 2012. "Is caste destiny? Occupational diversification among Dalits in rural India," Brooks World Poverty Institute Working Paper Series 16212, BWPI, The University of Manchester.
- Gang, Ira N. & Sen, Kunal & Yun, Myeong-Su, 2012. "Is Caste Destiny? Occupational Diversification among Dalits in Rural India," IZA Discussion Papers 6295, Institute for the Study of Labor (IZA).
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