Asset, Activity, And Income Diversification Among African Agriculturalists: Some Practical Issues
This paper starts from the premise that diversification of assets, activities, and incomes is important to African rural households, in that diversification into nonfarm income constitutes on average about 45 percent of incomes, and the push and pull factors driving that diversification are bound to persist. From that premise, we noted that the empirical study of diversification has been beset by practical problems and issues relating to (1) definitions and concepts, (2) data collection, and to (3) measurement of the nature and extent of diversification. The paper addressed each of those problems. Two points are of special interest to the overall conceptualization of diversification research. The first is that empirical studies have exhibited a wide variety - bordering on confusion - of systems of classification of assets, activities, and incomes as pertains to diversification behavior. We argued that the classification should conform to that used in standard practice of national accounts and macro input-output table construction, classifying activities into economic sectors that have standard definitions, and the classification of which does not depend on the location or functional type (wage- or self-employment) of the activity. We further argued that given a sectoral classification, it is useful to make a functional and locational categorization of the activity, and keep each of these three dimensions of the activity - sectoral, functional, and locational - separate and distinct so as to avoid confusion. The second is that it is useful to have an image of a production function in mind when analyzing the components of diversification behavior: (1) assets are the factors of production, representing the capacity of the household to diversify; (2) activities are the ex ante production flows of asset services; (3) incomes are the ex post flows of incomes, and it is crucial to note that the goods and services produced by activities need to be valued by prices, formed by markets at meso and macro levels, in order to be the measured outcomes called incomes. "Livelihoods" is a term used frequently in recent diversification research, and while its meaning differs somewhat over studies, it generally means household and community behavior, with respect to holdings and use of assets and the productive activities to which the assets are applied. The link between livelihoods and incomes needs to be made by valuing the output of livelihood activities at market (and/or virtual) prices. That valuation permits an analytical link between household/community behavior (thus a micro view of diversification) and the aggregate functioning of markets (thus a link with the meso and macro levels and the policies pertaining thereto).
|Date of creation:||2000|
|Date of revision:|
|Contact details of provider:|| Postal: Warren Hall, Ithaca NY 14853|
Web page: http://aem.cornell.edu/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thomas Reardon & Eric Crawford & Valerie Kelly, 1994.
"Links Between Nonfarm Income and Farm Investment in African Households: Adding the Capital Market Perspective,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 76(5), pages 1172-1176.
- Reardon, Thomas A. & Crawford, Eric W. & Kelly, Valerie, 1994. "Links Between Nonfarm Income and Farm Investment in African Households: Adding the Capital Market Perspective," Staff Papers 201191, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Weersink, Alfons & Nicholson, Charles & Weerhewa, Jeeveka, 1998.
"Multiple job holdings among dairy farm families in New York and Ontario,"
Blackwell, vol. 18(2), pages 127-143, March.
- Weersink, Alfons & Nicholson, Charles & Weerhewa, Jeeveka, 1998. "Multiple job holdings among dairy farm families in New York and Ontario," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 18(2), March.
- Weersink, Alfons & Nicholson, Charles & Weerahewa, Jeevika, 1996. "Multiple Job-Holdings Among Dairy Farm Families In New York And Ontario," Working Papers 244752, University of Guelph, Department of Food, Agricultural and Resource Economics.
- 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.
- Rosenzweig, Mark R. & Binswanger, Hans P., 1992.
"Wealth, weather risk, and the composition and profitability of agricultural investments,"
Policy Research Working Paper Series
1055, The World Bank.
- Rosenzweig, Mark R & Binswanger, Hans P, 1993. "Wealth, Weather Risk and the Composition and Profitability of Agricultural Investments," Economic Journal, Royal Economic Society, vol. 103(416), pages 56-78, January.
- Rosenzweig, Mark R. & Binswanger, Hans P., 1989. "Wealth, Weather Risk and the Composition and Profitability of Agricultural Investments," Bulletins 7455, University of Minnesota, Economic Development Center.
- Boisvert, Richard N. & Ranney, Christine K., 1990. "Accounting For The Importance Of Nonfarm Income On Farm Family Income Inequality In New York," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 19(1), April.
- Livingstone, Ian, 1991. "A reassessment of Kenya's rural and urban informal sector," World Development, Elsevier, vol. 19(6), pages 651-670, June.
- Tschirley, David L. & Weber, Michael T., 1994. "Food security strategies under extremely adverse conditions: The determinants of household income and consumption in rural Mozambique," World Development, Elsevier, vol. 22(2), pages 159-173, February.
- Ranis, Gustav & Stewart, Frances, 1993. "Rural nonagricultural activities in development : Theory and application," Journal of Development Economics, Elsevier, vol. 40(1), pages 75-101, February.
- Savadogo, Kimseyinga & Reardon, Thomas & Pietola, Kyosti, 1998. "Adoption of improved land use technologies to increase food security in Burkina Faso: relating animal traction, productivity, and non-farm income," Agricultural Systems, Elsevier, vol. 58(3), pages 441-464, November.
- Teklu, Tesfaye & von Braun, Joachim & Zaki, Elsayed & Ali, Ahmed, 1991. "Drought and famine relationships in Sudan: policy implications," Research reports 88, International Food Policy Research Institute (IFPRI).
- Pramila Krishnan & Stefan Dercon, 1995.
"Income portfolios in rural Ethiopia and Tanzania: choices and constraints,"
CSAE Working Paper Series
1995-12, Centre for the Study of African Economies, University of Oxford.
- Stefan Dercon & Pramila Krishnan, 1995. "Income portfolios in rural Ethiopia and Tanzania: choices and constraints," Economics Series Working Papers WPS/1995-12, University of Oxford, Department of Economics.
- Stefan Dercon, 1996.
"Wealth, risk and activity choices: cattle in Western Tanzania,"
Economics Series Working Papers
WPS/1996-08, University of Oxford, Department of Economics.
- Dercon, Stefan, 1998. "Wealth, risk and activity choice: cattle in Western Tanzania," Journal of Development Economics, Elsevier, vol. 55(1), pages 1-42, February.
- Stefan Dercon, 1996. "Wealth, risk and activity choices: cattle in Western Tanzania," CSAE Working Paper Series 1996-08, Centre for the Study of African Economies, University of Oxford.
- Steven Were Omamo, 1998. "Farm-to-market transaction costs and specialisation in small-scale agriculture: Explorations with a non-separable household model," Journal of Development Studies, Taylor & Francis Journals, vol. 35(2), pages 152-163.
- Andre, Catherine & Platteau, Jean-Philippe, 1998. "Land relations under unbearable stress: Rwanda caught in the Malthusian trap," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 1-47, January.
- Reardon, Thomas & Vosti, Stephen A., 1995. "Links between rural poverty and the environment in developing countries: Asset categories and investment poverty," World Development, Elsevier, vol. 23(9), pages 1495-1506, September.
- Frank Ellis, 1998. "Household strategies and rural livelihood diversification," Journal of Development Studies, Taylor & Francis Journals, vol. 35(1), pages 1-38.
- Alderman, H. & Paxson, C.H., 1992.
"Do the Poor Insure? A Synthesis of the Literature on Risk and Consumption in Developing Countries,"
164, Princeton, Woodrow Wilson School - Development Studies.
- Alderman, Harold & Paxson, Christina H & DEC, 1992. "Do the poor insure? A synthesis of the literature on risk and consumption in developing countries," Policy Research Working Paper Series 1008, The World Bank.
- de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, vol. 101(409), pages 1400-417, November.
- Glewwe, P. & Van Der Gaag, J., 1988. "Confronting Poverty In Developing Countries -," Papers 48, World Bank - Living Standards Measurement.
- Haggblade, Steven & Hazell, Peter & Brown, James, 1989.
"Farm-nonfarm linkages in rural sub-Saharan Africa,"
Elsevier, vol. 17(8), pages 1173-1201, August.
- Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February.
- Christopher B. Barrett & Peter Arcese, 1998. "Wildlife Harvest in Integrated Conservation and Development Projects: Linking Harvest to Household Demand, Agricultural Production, and Environmental Shocks in the Serengeti," Land Economics, University of Wisconsin Press, vol. 74(4), pages 449-465.
- Reardon, Thomas & Taylor, J. Edward, 1996. "Agroclimatic shock, income inequality, and poverty: Evidence from Burkina Faso," World Development, Elsevier, vol. 24(5), pages 901-914, May.
- von Braun, Joachim & Pandya-Lorch, Rajul, 1991. "Income sources of malnourished people in rural areas: Microlevel information and policy implications," IFPRI working papers 5, International Food Policy Research Institute (IFPRI).
- von Braun, Joachim & Puetz, Detlev & Webb, Patrick, 1989. "Irrigation technology and commercialization of rice in the Gambia: effects on income and nutrition," Research reports 75, International Food Policy Research Institute (IFPRI).
- Valentine, Theodore R., 1993. "Drought, transfer entitlements, and income distribution: The Botswana experience," World Development, Elsevier, vol. 21(1), pages 109-126, January.
- Anderson, Dennis & Leiserson, Mark W, 1980. "Rural Nonfarm Employment in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 28(2), pages 227-48, January.
- Barrett, Christopher B., 1997. "Food marketing liberalization and trader entry: Evidence from Madagascar," World Development, Elsevier, vol. 25(5), pages 763-777, May.
- Thomas Reardon & J. Edward Taylor & Kostas Stamoulis & Peter Lanjouw & Arsenio Balisacan, 2000. "Effects of Non-Farm Employment on Rural Income Inequality in Developing Countries: An Investment Perspective," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 266-288.
- Adams, Richard H. Jr. & Alderman, Harold, 1992.
"Sources of income inequality in rural Pakistan : a decomposition analysis,"
Policy Research Working Paper Series
836, The World Bank.
- Adams, Richard H, Jr & Alderman, Harold, 1992. "Sources of Income Inequality in Rural Pakistan: A Decomposition Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(4), pages 591-608, November.
- Bigsten, Arne, 1996. "The Circular Migration of Smallholders in Kenya," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 5(1), pages 1-20, March.
- Chavas, Jean-Paul & Aliber, Michael, 1993. "An Analysis Of Economic Efficiency In Agriculture: A Nonparametric Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(01), July.
- Reardon, Thomas & Matlon, Peter & Delgado, Christopher, 1988. "Coping with household-level food insecurity in drought-affected areas of Burkina Faso," World Development, Elsevier, vol. 16(9), pages 1065-1074, September.
- Barrett, Vincent & Lassiter, Gregory C. & Wilcock, David & Baker, Doyle Curtis & Crawford, Eric W., 1982. "Animal Traction in Eastern Upper Volta: A Technical, Economic and Institutional Analysis," Food Security International Development Papers 54067, Michigan State University, Department of Agricultural, Food, and Resource Economics.
When requesting a correction, please mention this item's handle: RePEc:ags:cudawp:14734. 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: (AgEcon Search)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.