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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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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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