IDEAS home Printed from https://ideas.repec.org/a/spr/agfoec/v6y2018i1d10.1186_s40100-018-0098-0.html
   My bibliography  Save this article

Impact of off-farm activities on technical efficiency: evidence from maize producers of eastern Ethiopia

Author

Listed:
  • Musa Hasen Ahmed

    () (Haramaya University)

  • Kumilachew Alamerie Melesse

    () (Haramaya University)

Abstract

Abstract This article analyzes the impact of participation in off-farm activities on technical efficiency of maize production in eastern Ethiopia. We combined propensity score matching with a stochastic production frontier model that corrects sample selection bias resulting from unobserved factors that potentially affect both households’ decision to participate in off-farm activities and technical efficiency scores that most previous studies do not account for. The probit model results indicate that sex of the household head, literacy of the spouse, agricultural cooperative membership, family size, and access to market information had significant effect on farmers’ participation in off-farm activities. In the meantime, it was found that farmers who participated in off-farm activities have a significant technical efficiency gain compared with their non-participant counterparts.

Suggested Citation

  • Musa Hasen Ahmed & Kumilachew Alamerie Melesse, 2018. "Impact of off-farm activities on technical efficiency: evidence from maize producers of eastern Ethiopia," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-15, December.
    • Handle: RePEc:spr:agfoec:v:6:y:2018:i:1:d:10.1186_s40100-018-0098-0
    DOI: 10.1186/s40100-018-0098-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s40100-018-0098-0
    File Function: Abstract
    Download Restriction: no

    References listed on IDEAS

    as
    1. Headey, Derek & Dereje, Mekdim & Taffesse, Alemayehu Seyoum, 2014. "Land constraints and agricultural intensification in Ethiopia: A village-level analysis of high-potential areas," Food Policy, Elsevier, vol. 48(C), pages 129-141.
    2. Gustavo Anríquez & Silvio Daidone, 2010. "Linkages between the farm and nonfarm sectors at the household level in rural Ghana: a consistent stochastic distance function approach," Agricultural Economics, International Association of Agricultural Economists, vol. 41(1), pages 51-66, January.
    3. Bezu, Sosina & Barrett, Christopher B. & Holden, Stein T., 2012. "Does the Nonfarm Economy Offer Pathways for Upward Mobility? Evidence from a Panel Data Study in Ethiopia," World Development, Elsevier, vol. 40(8), pages 1634-1646.
    4. Jean-Paul Chavas & Ragan Petrie & Michael Roth, 2005. "Farm Household Production Efficiency: Evidence from The Gambia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 160-179.
    5. Babatunde, Raphael O. & Qaim, Matin, 2010. "Impact of off-farm income on food security and nutrition in Nigeria," Food Policy, Elsevier, vol. 35(4), pages 303-311, August.
    6. Wouterse, Fleur & Taylor, J. Edward, 2008. "Migration and Income Diversification:: Evidence from Burkina Faso," World Development, Elsevier, vol. 36(4), pages 625-640, April.
    7. Hung‐Hao Chang & Fang‐I Wen, 2011. "Off‐farm work, technical efficiency, and rice production risk in Taiwan," Agricultural Economics, International Association of Agricultural Economists, vol. 42(2), pages 269-278, March.
    8. González-Flores, Mario & Bravo-Ureta, Boris E. & Solís, Daniel & Winters, Paul, 2014. "The impact of high value markets on smallholder productivity in the Ecuadorean Sierra: A Stochastic Production Frontier approach correcting for selectivity bias," Food Policy, Elsevier, vol. 44(C), pages 237-247.
    9. Kularatne Mohottala Gedara & Clevo Wilson & Sean Pascoe & Tim Robinson, 2012. "Factors Affecting Technical Efficiency of Rice Farmers in Village Reservoir Irrigation Systems of Sri Lanka," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(3), pages 627-638, September.
    10. Janvry, Alain de & Sadoulet, Elisabeth, 2001. "Income Strategies Among Rural Households in Mexico: The Role of Off-farm Activities," World Development, Elsevier, vol. 29(3), pages 467-480, March.
    11. Jin Yang & Hui Wang & Songqing Jin & Kevin Chen & Jeffrey Riedinger & Chao Peng, 2016. "Migration, local off-farm employment, and agricultural production efficiency: evidence from China," Journal of Productivity Analysis, Springer, vol. 45(3), pages 247-259, June.
    12. Foster, Andrew D & Rosenzweig, Mark R, 2004. "Agricultural Productivity Growth, Rural Economic Diversity, and Economic Reforms: India, 1970-2000," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 509-542, April.
    13. Haggblade, Steven & Hazell, Peter & Reardon, Thomas, 2010. "The Rural Non-farm Economy: Prospects for Growth and Poverty Reduction," World Development, Elsevier, vol. 38(10), pages 1429-1441, October.
    14. Zezza, Alberto & Carletto, Gero & Davis, Benjamin & Stamoulis, Kostas & Winters, Paul, 2009. "Rural Income Generating Activities: Whatever Happened to the Institutional Vacuum? Evidence from Ghana, Guatemala, Nicaragua and Vietnam," World Development, Elsevier, vol. 37(7), pages 1297-1306, July.
    15. Bezu, Sosina & Holden, Stein, 2014. "Are Rural Youth in Ethiopia Abandoning Agriculture?," World Development, Elsevier, vol. 64(C), pages 259-272.
    16. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    17. Catherine Larochelle & Jeffrey Alwang, 2013. "The Role of Risk Mitigation in Production Efficiency: A Case Study of Potato Cultivation in the Bolivian Andes," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(2), pages 363-381, June.
    18. Bozoglu, Mehmet & Ceyhan, Vedat, 2007. "Measuring the technical efficiency and exploring the inefficiency determinants of vegetable farms in Samsun province, Turkey," Agricultural Systems, Elsevier, vol. 94(3), pages 649-656, June.
    19. Tian, Xu & Sun, Feifei & Zhou, Yingheng, 2015. "Technical Efficiency and Its Determinants in China's Hog Production," 2015 Conference, August 9-14, 2015, Milan, Italy 212718, International Association of Agricultural Economists.
    20. Stefan Dercon & John Hoddinott & Tassew Woldehanna, 2012. "Growth and Chronic Poverty: Evidence from Rural Communities in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 48(2), pages 238-253, February.
    21. repec:oup:revage:v:30:y:2008:i:2:p:311-332. is not listed on IDEAS
    22. Barrett, C. B. & Reardon, T. & Webb, P., 2001. "Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications," Food Policy, Elsevier, vol. 26(4), pages 315-331, August.
    23. Léopold Simar & Paul W. Wilson, 2015. "Statistical Approaches for Non-parametric Frontier Models: A Guided Tour," International Statistical Review, International Statistical Institute, vol. 83(1), pages 77-110, April.
    24. Gbemisola Oseni & Paul Winters, 2009. "Rural nonfarm activities and agricultural crop production in Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 189-201, March.
    25. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    26. William Greene, 2010. "A stochastic frontier model with correction for sample selection," Journal of Productivity Analysis, Springer, vol. 34(1), pages 15-24, August.
    27. Kazushi Takahashi & Christopher B. Barrett, 2014. "The System of Rice Intensification and its Impacts on Household Income and Child Schooling: Evidence from Rural Indonesia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(1), pages 269-289.
    28. Peter Lanjouw & Rinku Murgai, 2009. "Poverty decline, agricultural wages, and nonfarm employment in rural India: 1983–2004," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 243-263, March.
    29. Gudbrand Lien & Subal C. Kumbhakar & J. Brian Hardaker, 2010. "Determinants of off‐farm work and its effects on farm performance: the case of Norwegian grain farmers," Agricultural Economics, International Association of Agricultural Economists, vol. 41(6), pages 577-586, November.
    30. Talip Kilic & Calogero Carletto & Juna Miluka & Sara Savastano, 2009. "Rural nonfarm income and its impact on agriculture: evidence from Albania," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 139-160, March.
    31. Ruben, Ruerd & Van den berg, Marrit, 2001. "Nonfarm Employment and Poverty Alleviation of Rural Farm Households in Honduras," World Development, Elsevier, vol. 29(3), pages 549-560, March.
    32. Russell L. Lamb, 2003. "Fertilizer Use, Risk, and Off-Farm Labor Markets in the Semi-Arid Tropics of India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 359-371.
    33. Elan Satriawan & Scott M. Swinton, 2007. "Does human capital raise farm or nonfarm earning more? New insight from a rural Pakistan household panel," Agricultural Economics, International Association of Agricultural Economists, vol. 36(3), pages 421-428, May.
    34. Boris Bravo-Ureta & William Greene & Daniel Solís, 2012. "Technical efficiency analysis correcting for biases from observed and unobserved variables: an application to a natural resource management project," Empirical Economics, Springer, vol. 43(1), pages 55-72, August.
    35. Ashok K. Mishra & Kh. A. Mottaleb & Samarendu Mohanty, 2015. "Impact of off-farm income on food expenditures in rural Bangladesh: an unconditional quantile regression approach," Agricultural Economics, International Association of Agricultural Economists, vol. 46(2), pages 139-148, March.
    36. Woldehanna, Tassew & Lansink, Alfons Oude & Peerlings, Jack, 2000. "Off-farm work decisions on Dutch cash crop farms and the 1992 and Agenda 2000 CAP reforms," Agricultural Economics, Blackwell, vol. 22(2), pages 163-171, March.
    37. Hisham S. El-Osta & Ashok K. Mishra & Mitchell J. Morehart, 2008. "Off-Farm Labor Participation Decisions of Married Farm Couples and the Role of Government Payments," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(2), pages 311-332.
    38. Feng, Shuyi & Heerink, Nico & Ruben, Ruerd & Qu, Futian, 2010. "Land rental market, off-farm employment and agricultural production in Southeast China: A plot-level case study," China Economic Review, Elsevier, vol. 21(4), pages 598-606, December.
    39. Davis, Benjamin & Winters, Paul & Carletto, Gero & Covarrubias, Katia & Quiñones, Esteban J. & Zezza, Alberto & Stamoulis, Kostas & Azzarri, Carlo & DiGiuseppe, Stefania, 2010. "A Cross-Country Comparison of Rural Income Generating Activities," World Development, Elsevier, vol. 38(1), pages 48-63, January.
    40. Owusu, Victor & Abdulai, Awudu & Abdul-Rahman, Seini, 2011. "Non-farm work and food security among farm households in Northern Ghana," Food Policy, Elsevier, vol. 36(2), pages 108-118, April.
    41. Diao, Xinshen & Hazell, Peter & Thurlow, James, 2010. "The Role of Agriculture in African Development," World Development, Elsevier, vol. 38(10), pages 1375-1383, October.
    42. Barry K. Goodwin & Ashok K. Mishra, 2004. "Farming Efficiency and the Determinants of Multiple Job Holding by Farm Operators," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 722-729.
    43. Matshe, Innocent & Young, Trevor, 2004. "Off-farm labour allocation decisions in small-scale rural households in Zimbabwe," Agricultural Economics, Blackwell, vol. 30(3), pages 175-186, May.
    44. Minten, Bart & Barrett, Christopher B., 2008. "Agricultural Technology, Productivity, and Poverty in Madagascar," World Development, Elsevier, vol. 36(5), pages 797-822, May.
    45. Chen, Xiaogang & Skully, Michael & Brown, Kym, 2005. "Banking efficiency in China: Application of DEA to pre- and post-deregulation eras: 1993-2000," China Economic Review, Elsevier, vol. 16(3), pages 229-245.
    46. Kelvin Balcombe & Iain Fraser & Mizanur Rahman & Laurence Smith, 2007. "Examining the technical efficiency of rice producers in Bangladesh," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(1), pages 1-16.
    47. Štefan Bojnec & Imre Fertő, 2013. "Farm income sources, farm size and farm technical efficiency in Slovenia," Post-Communist Economies, Taylor & Francis Journals, vol. 25(3), pages 343-356, September.
    48. Abate, Gashaw Tadesse & Rashid, Shahidur & Borzaga, Carlo & Getnet, Kindie, 2016. "Rural Finance and Agricultural Technology Adoption in Ethiopia: Does the Institutional Design of Lending Organizations Matter?," World Development, Elsevier, vol. 84(C), pages 235-253.
    49. Babatunde, Raphael O. & Qaim, Matin, 2010. "Impact of Off-farm Income on Food Security and Nutrition in Nigeria," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 97332, African Association of Agricultural Economists (AAAE).
    50. Tijani, A.A., 2006. "Analysis of the technical efficiency of rice farms in Ijesha Land of Osun State, Nigeria," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(2), pages 1-10, June.
    51. repec:zwi:journl:v:43:y:2012:i:1:p:55-72 is not listed on IDEAS
    52. Binam, Joachim Nyemeck & Tonye, Jean & wandji, Njankoua & Nyambi, Gwendoline & Akoa, Mireille, 2004. "Factors affecting the technical efficiency among smallholder farmers in the slash and burn agriculture zone of Cameroon," Food Policy, Elsevier, vol. 29(5), pages 531-545, October.
    53. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics, Blackwell, vol. 26(1), pages 1-23, October.
    54. Marco Stampini & Benjamin Davis, 2009. "Does nonagricultural labor relax farmers’ credit constraints? Evidence from longitudinal data for Vietnam," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 177-188, March.
    55. Collier, Paul & Dercon, Stefan, 2014. "African Agriculture in 50Years: Smallholders in a Rapidly Changing World?," World Development, Elsevier, vol. 63(C), pages 92-101.
    56. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    57. Dawson, Neil & Martin, Adrian & Sikor, Thomas, 2016. "Green Revolution in Sub-Saharan Africa: Implications of Imposed Innovation for the Wellbeing of Rural Smallholders," World Development, Elsevier, vol. 78(C), pages 204-218.
    58. Gian Nicola Francesconi & Nico Heerink, 2011. "Ethiopian Agricultural Cooperatives in an Era of Global Commodity Exchange: Does Organisational Form Matter?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 20(1), pages 153-177, January.
    59. Jema Haji, 2007. "Production Efficiency of Smallholders' Vegetable-dominated Mixed Farming System in Eastern Ethiopia: A Non-Parametric Approach," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 16(1), pages 1-27, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:chieco:v:52:y:2018:i:c:p:80-94 is not listed on IDEAS
    2. Kotchikpa Gabriel Lawin & Lota Tamini, 2019. "Determinants of Crop Diversification in Burkina Faso - What is the Impact of Risk Preference?," CIRANO Working Papers 2019s-07, CIRANO.
    3. repec:gam:jecomi:v:7:y:2019:i:4:p:103-:d:274814 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:agfoec:v:6:y:2018:i:1:d:10.1186_s40100-018-0098-0. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Springer Nature Abstracting and Indexing). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.