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Diversification and Livelihood Sustainability in a Semi-Arid Environment: A Case Study from Southern Ethiopia

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Author Info
Wassie Berhanu
David Colman
Bichaka Fayissa

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Abstract

This paper examines the recently growing adoption of non-pastoral livelihood strategies among the Borana pastoralists in southern Ethiopia. A large portion of the current non-pastoral participation is in petty and natural resource-based activities. Pastoral and crop production functions are estimated using the Cobb-Douglas model to analyse the economic rationale behind the growing pastoralist shift to cultivation and other non-pastoral activities. The low marginal return to labour in traditional pastoralism suggests the existence of surplus labour that can gainfully be transferred to non-pastoral activities. An examination of the pastoralist activity choices reveals that the younger households with literacy and more exposure to the exchange system display a more diversified income portfolio preference. The findings underscore the importance of human capital investment and related support services for improving the pastoralist capacity to manage risk through welfare-enhancing diversified income portfolio adoption.

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Paper provided by Middle Tennessee State University, Department of Economics and Finance in its series Working Papers with number 200806.

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Date of creation: Jul 2008
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Handle: RePEc:mts:wpaper:200806

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Related research
Keywords: Pastoralism; Dryland Farming; Diversification; Production Functions; Ethiopia.;

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Find related papers by JEL classification:
D00 - Microeconomics - - General - - - General
I3 - Health, Education, and Welfare - - Welfare and Poverty
J2 - Labor and Demographic Economics - - Demand and Supply of Labor
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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  1. Block, S. & Webb, P., 2001. "The dynamics of livelihood diversification in post-famine Ethiopia," Food Policy, Elsevier, vol. 26(4), pages 333-350, August. [Downloadable!] (restricted)
  2. Greene, William H., 1980. "On the estimation of a flexible frontier production model," Journal of Econometrics, Elsevier, vol. 13(1), pages 101-115, May. [Downloadable!] (restricted)
  3. Jacoby, Hanan G, 1993. "Shadow Wages and Peasant Family Labour Supply: An Econometric Application to the Peruvian Sierra," Review of Economic Studies, Blackwell Publishing, vol. 60(4), pages 903-21, October. [Downloadable!] (restricted)
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  4. Reardon, Thomas, 1997. "Using evidence of household income diversification to inform study of the rural nonfarm labor market in Africa," World Development, Elsevier, vol. 25(5), pages 735-747, May. [Downloadable!] (restricted)
  5. 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)
  6. Jacoby, Hanan G., 1991. "Productivity of men and women and the sexual division of labor in peasant agriculture of the Peruvian Sierra," Journal of Development Economics, Elsevier, vol. 37(1-2), pages 265-287, November. [Downloadable!] (restricted)
  7. Reardon, Thomas & Berdegue, Julio & Escobar, German, 2001. "Rural Nonfarm Employment and Incomes in Latin America: Overview and Policy Implications," World Development, Elsevier, vol. 29(3), pages 395-409, March. [Downloadable!] (restricted)
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