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Rational But Poor? An Explanation for Rural Economic Livelihood Strategy

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  • Fred Mawunyo Dzanku

Abstract

Using panel data for six rural sub†Saharan Africa countries, this article tests two hypotheses: (i) household†specific staple food price bands resulting from market failures in the presence of liquidity constraints and rainfed agriculture induces rural household specialisation in food crops as an economic livelihood strategy; (ii) specialisation in food crops yields inferior welfare than diversification, and keeps households trapped in poverty. The results lend strong support to both hypotheses, reinforcing the need for public investment in rural infrastructure in order to encourage household livelihood diversification for improved welfare.

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  • Fred Mawunyo Dzanku, 2018. "Rational But Poor? An Explanation for Rural Economic Livelihood Strategy," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(2), pages 365-381, June.
    • Handle: RePEc:bla:jageco:v:69:y:2018:i:2:p:365-381
    DOI: 10.1111/1477-9552.12245
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    2. Li, Dongmei & Yang, Yuanyuan & Du, Guoming & Huang, Shanlin, 2021. "Understanding the contradiction between rural poverty and rich cultivated land resources: A case study of Heilongjiang Province in Northeast China," Land Use Policy, Elsevier, vol. 108(C).
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