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Boda Bodas Rule: Non-agricultural Activities and Their Inequality Implications in Western Kenya

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Author Info
Jann Lay
George Michuki M'Mukaria
Toman Omar Mahmoud

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Abstract

Engagement in non-agricultural activities in rural areas can be classified into survival-led or opportunity-led. Survival-led diversification would decrease inequality by increasing the incomes of poorer households and thus reduce poverty. By contrast, opportunity-led diversification would increase inequality and have a minor effect on poverty, as it tends to be confined to non-poor households. Using data from Western Kenya, we confirm the existence of the differently motivated diversification strategies. Yet, the poverty and inequality implications differ somewhat from our expectations. Our findings indicate that in addition to asset constraints, rural households also face limited or relatively risky high-return opportunities outside agriculture.

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Publisher Info
Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1314.

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Length: 30 pages
Date of creation: Mar 2007
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Handle: RePEc:kie:kieliw:1314

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Related research
Keywords: Income diversification non-agricultural activities inequality poverty sub-Saharan Africa Kenya

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Find related papers by JEL classification:
Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare

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  2. Islam, Nurul, 1997. "The nonfarm sector and rural development: review of issues and evidence," 2020 vision discussion papers 22, International Food Policy Research Institute (IFPRI). [Downloadable!]
  3. Stefan Dercon, 2002. "Income Risk, Coping Strategies, and Safety Nets," World Bank Research Observer, Oxford University Press, vol. 17(2), pages 141-166, September.
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  5. Dercon, Stefan, 1998. "Wealth, risk and activity choice: cattle in Western Tanzania," Journal of Development Economics, Elsevier, vol. 55(1), pages 1-42, February. [Downloadable!] (restricted)
  6. Elbers, Chris & Lanjouw, Peter, 2001. "Intersectoral Transfer, Growth, and Inequality in Rural Ecuador," World Development, Elsevier, vol. 29(3), pages 481-496, March. [Downloadable!] (restricted)
  7. Barrett, Christopher B. & Bezuneh, Mesfin & Aboud, Abdillahi, 2001. "Income diversification, poverty traps and policy shocks in Cote d'Ivoire and Kenya," Food Policy, Elsevier, vol. 26(4), pages 367-384, August. [Downloadable!] (restricted)
  8. Haggblade, Steven & Hazell, P. B. R. & Reardon, Thomas, 2002. "Strategies for stimulating poverty-alleviating growth in the rural nonfarm economy in developing countries:," EPTD discussion papers 92, International Food Policy Research Institute (IFPRI). [Downloadable!]
  9. Islam, Nurul, 1997. "The nonfarm sector and rural development," 2020 vision briefs 47, International Food Policy Research Institute (IFPRI).
  10. Ferreira, Francisco H. G. & Lanjouw, Peter, 2001. "Rural Nonfarm Activities and Poverty in the Brazilian Northeast," World Development, Elsevier, vol. 29(3), pages 509-528, March. [Downloadable!] (restricted)
  11. Stark, Oded & Taylor, J Edward & Yitzhaki, Shlomo, 1986. "Remittances and Inequality," Economic Journal, Royal Economic Society, vol. 96(383), pages 722-40, September. [Downloadable!] (restricted)
  12. Jyotsna Jalan & Martin Ravallion, 1998. "Geographic Poverty Traps?," Boston University - Institute for Economic Development 86, Boston University, Institute for Economic Development.
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