IDEAS home Printed from https://ideas.repec.org/p/ags/faoaes/289028.html
   My bibliography  Save this paper

Patterns of rural development: a cross-country comparison using microeconomic data

Author

Listed:
  • Winters, Paul
  • Essam, Timothy
  • Davis, Benjamin
  • Zezza, Alberto
  • Carletto, Calogero
  • Stamoulis, Kostas

Abstract

This article proposes a general pattern of rural development in which rises in per capita income are associated with a decline in the importance of agricultural production and a rise in the importance of non-agricultural income sources. Following the approach to examining Engel's Law, we use data from 15 developing countries and a merged data set to test whether such a pattern emerges. The analysis shows a strong, positive relationship between rising per capita income and the share of income earned from rural non-agricultural activities and a negative relationship between per capita income and agricultural production.

Suggested Citation

  • Winters, Paul & Essam, Timothy & Davis, Benjamin & Zezza, Alberto & Carletto, Calogero & Stamoulis, Kostas, 2008. "Patterns of rural development: a cross-country comparison using microeconomic data," ESA Working Papers 289028, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    • Handle: RePEc:ags:faoaes:289028
    DOI: 10.22004/ag.econ.289028
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/289028/files/a-aj283e.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.289028?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alberto Zezza & Paul Winters & Benjamin Davis & Gero Carletto & Katia Covarrubias & Esteban Quinones & Kostas Stamoulis & Takis Karfakisis & Luca Tasciottiis & Stefania DiGiuseppe & Genny Bonomitiis, 2008. "Rural Household Access to Assets and Agrarian Institutions : A Cross Country Comparison," World Bank Publications - Reports 9197, The World Bank Group.
    2. Zezza, Alberto & Winters, Paul C. & Davis, Benjamin & Carletto, Calogero & Covarrubias, Katia & Quinones, Esteban & Stamoulis, Kostas G. & Di Giuseppe, Stefania, 2007. "Rural Household Access to Assets and Agrarian Institutions: A Cross Country Comparison," 106th Seminar, October 25-27, 2007, Montpellier, France 7925, European Association of Agricultural Economists.
    3. 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.
    4. Elbers, Chris & Lanjouw, Peter, 2001. "Intersectoral Transfer, Growth, and Inequality in Rural Ecuador," World Development, Elsevier, vol. 29(3), pages 481-496, March.
    5. Byrne, Patrick J. & Capps, Oral, Jr., 1996. "Does Engel'S Law Extend To Food Away From Home?," Journal of Food Distribution Research, Food Distribution Research Society, vol. 27(2), pages 1-11, July.
    6. Winters, Paul & Davis, Benjamin & Carletto, Gero & Covarrubias, Katia & Quiñones, Esteban J. & Zezza, Alberto & Azzarri, Carlo & Stamoulis, Kostas, 2009. "Assets, Activities and Rural Income Generation: Evidence from a Multicountry Analysis," World Development, Elsevier, vol. 37(9), pages 1435-1452, September.
    7. Robert E. Lucas, 2009. "Trade and the Diffusion of the Industrial Revolution," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 1-25, January.
    8. 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.
    9. Holcomb, Rodney B. & Park, John L. & Capps, Oral, Jr., 1995. "Revisiting Engel'S Law: Examining Expenditure Patterns For Food At Home And Away From Home," Journal of Food Distribution Research, Food Distribution Research Society, vol. 26(2), pages 1-8, September.
    10. Peter Timmer & Selvin Akkus, 2008. "The Structural Transformation as a Pathway out of Poverty: Analytics, Empirics and Politics," Working Papers 150, Center for Global Development.
    11. Benjamin Davis & Paul Winters & Gero Carletto & Katia Covarrubias & Esteban Quinones & Alberto Zezza & Kostas Stamoulis & Genny Bonomi & Stefania DiGiuseppe, 2008. "Rural Income Generating Activities : A Cross Country Comparison," World Bank Publications - Reports 9198, The World Bank Group.
    12. 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.
    13. Xavier Irz & Terry Roe, 2005. "Seeds of growth? Agricultural productivity and the transitional dynamics of the Ramsey model," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 32(2), pages 143-165, June.
    14. Papke, Leslie E & Wooldridge, Jeffrey M, 1996. "Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 619-632, Nov.-Dec..
    15. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 720-744, August.
    16. nan, 2007. "Transforming the rural nonfarm economy: Opportunities and threats in the developing world," IFPRI books, International Food Policy Research Institute (IFPRI), number 978-0-8018-8664-5 edited by Haggblade, Steven; Hazell, Peter B. R.; Reardon, Thomas Anthony.
    17. Benjamin Davis & Paul Winters & Gero Carletto & Katia Covarrubias & Esteban Quinones & Alberto Zezza & Kostas Stamoulis & Genny Bonomi & Stefania DiGiuseppe, 2007. "Rural Income Generating Activities; A Cross Country Comparison," Working Papers 07-16, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    18. Moon, Choon-Geol, 1989. "A Monte Carlo Comparison of Semiparametric Tobit Estimators," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(4), pages 361-382, Oct.-Dec..
    19. Hymer, Stephen H & Resnick, Stephen, 1969. "A Model of an Agrarian Economy with Nonagricultural Activities," American Economic Review, American Economic Association, vol. 59(4), pages 493-506, Part I Se.
    20. Corral, Leonardo & Reardon, Thomas, 2001. "Rural Nonfarm Incomes in Nicaragua," World Development, Elsevier, vol. 29(3), pages 427-442, March.
    21. 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.
    22. Martin, Will & Mitra, Devashish, 2001. "Productivity Growth and Convergence in Agriculture versus Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 49(2), pages 403-422, 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. Xiaoping Zhou & Xiaotian Li & Wei Song & Xiangbin Kong & Xiao Lu, 2021. "Farmland Transitions in China: An Advocacy Coalition Approach," Land, MDPI, vol. 10(2), pages 1-20, January.
    2. Kakungulu, Moses & Isabirye, Moses & Akoyi, Kevin Teopista & Hoyweghen, Kaat Van & Vranken, Liesbet & Maertens, Miet, 2021. "Changing income portfolios and household welfare in rural Uganda," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 60(3), July.
    3. Jan Fałkowski & Maciej Jakubowski & Paweł Strawiński, 2014. "Returns from income strategies in rural Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(1), pages 139-178, January.
    4. Davis,Benjamin K. & Di Giuseppe,Stefania & Zezza,Alberto & Davis,Benjamin K. & Di Giuseppe,Stefania & Zezza,Alberto, 2014. "Income diversification patterns in rural Sub-Saharan Africa : reassessing the evidence," Policy Research Working Paper Series 7108, The World Bank.
    5. Binswanger-Mkhize, Hans P. & Johnson, Timothy & Samboko, Paul Chimuka & You, Liangzhi, 2016. "The impact of urban growth on agricultural and rural non-farm growth in Kenya," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249274, African Association of Agricultural Economists (AAAE).
    6. Gamel Abdul-Nasser Salifu, 2019. "The Political Economy Dynamics of Rural Household Income Diversification: A Review of the International Literature," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 273-290, December.
    7. Fałkowski, Jan, 2016. "Promoting change or preserving the status quo? - the consequences of dominating local politics by agricultural interests. Some evidence on structural change in Poland during the transition period," 149th Seminar, October 27-28, 2016, Rennes, France 245115, European Association of Agricultural Economists.
    8. Benjamin Davis & Paul Winters & Thomas Reardon & Kostas Stamoulis, 2009. "Rural nonfarm employment and farming: household‐level linkages," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 119-123, March.
    9. Sharma, Govinda Prasad & Pandit, Ram & White, Ben & Polyakov, Maksym, 2015. "The Income Diversification Strategies of Smallholder Coffee Producers in Nepal," Working Papers 207693, University of Western Australia, School of Agricultural and Resource Economics.
    10. Van Hoyweghen, Kaat & Van Den Broek, Goedele & Maertens, Miet, 2018. "Understanding the importance of wage employment for rural development: Evidence from Senegal," Working Papers 272323, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    11. Ulf Römer & Oliver Mußhoff & Ron Weber & Calum G. Turvey, 2018. "Assessing the Reliability of Self‐reported Income Information in Informal Small Business Lending through a Bogus Pipeline Experiment," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 726-738, September.
    12. D'Amico, Mario & Coppola, Adele & Chinnici, Gaetano & Di Vita, Giuseppe & Pappalardo, Gioacchino, 2012. "EU Agricultural Systems in the new CAP perspectives," 126th Seminar, June 27-29, 2012, Capri, Italy 126116, European Association of Agricultural Economists.
    13. Ugo Pica-Ciamarra & Luca Tasciotti & Joachim Otte & Alberto Zezza, 2015. "Livestock in the Household Economy: Cross-Country Evidence from Microeconomic Data," Development Policy Review, Overseas Development Institute, vol. 33(1), pages 61-81, January.
    14. Headey, Derek, 2011. "Was the Global Food Crisis Really a Crisis?: Simulations versus Self-Reporting," Research briefs 17, International Food Policy Research Institute (IFPRI).
    15. 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.
    16. Gamel Abdul-Nasser Salifu & Kwabena Asomanin Anaman, 2019. "A Political Economy Analysis of Income Diversification Activities of Rural Households in the Northern Region of Ghana," Applied Economics and Finance, Redfame publishing, vol. 6(5), pages 10-34, September.
    17. Govinda P. Sharma & Ram Pandit & Ben White & Maksym Polyakov, 2020. "The income diversification strategies of smallholders in the hills of Nepal," Development Policy Review, Overseas Development Institute, vol. 38(6), pages 804-825, November.
    18. Sukhwinder Singh & Andrew D. Jones & Ruth S. DeFries & Meha Jain, 2020. "The association between crop and income diversity and farmer intra-household dietary diversity in India," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(2), pages 369-390, April.
    19. Kaat Van Hoyweghen & Goedele Van den Broeck & Miet Maertens, 2020. "Employment Dynamics and Linkages in the Rural Economy: Insights from Senegal," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(3), pages 904-928, September.
    20. Davis, Benjamin & Di Giuseppe, Stefania & Zezza, Alberto, 2017. "Are African households (not) leaving agriculture? Patterns of households’ income sources in rural Sub-Saharan Africa," Food Policy, Elsevier, vol. 67(C), pages 153-174.
    21. Fałkowski, Jan, 2017. "Promoting change or preserving the status quo? The consequences of dominating local politics by agricultural interests," Land Use Policy, Elsevier, vol. 68(C), pages 448-459.
    22. Vellema, W. & Buritica Casanova, A. & Gonzalez, C. & D’Haese, M., 2015. "The effect of specialty coffee certification on household livelihood strategies and specialisation," Food Policy, Elsevier, vol. 57(C), pages 13-25.
    23. Nadia Huffman & Wallace Huffman, 2021. "Convergence theory and conditional income convergence among sub‐Saharan African countries," Agricultural Economics, International Association of Agricultural Economists, vol. 52(6), pages 915-925, November.
    24. Sayla Khandoker & Alka Singh & Shivendra Kumar Srivastava, 2022. "Leveraging farm production diversity for dietary diversity: evidence from national level panel data," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-20, December.
    25. Tran, Tuyen & Vu, Huong, 2013. "Farmland loss, nonfarm diversification and inequality: A micro-econometric analysis of household surveys in Vietnam," MPRA Paper 47596, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Almeida, Alexandre N. & Bravo-Ureta, Boris E., 2019. "Agricultural productivity, shadow wages and off-farm labor decisions in Nicaragua," Economic Systems, Elsevier, vol. 43(1), pages 99-110.
    2. Anviksha Drall & Sabuj Kumar Mandal, 2020. "Determinants of various modes of rural non-farm sector (RNFS) employment in SAT (semi-arid tropics) and Eastern regions of India: an empirical analysis," Indian Economic Review, Springer, vol. 55(2), pages 253-282, December.
    3. Bezu, Sosina & Barrett, Christopher B., 2010. "Activity Choice in Rural Non-farm Employment (RNFE): Survival versus accumulative strategy," MPRA Paper 55034, University Library of Munich, Germany.
    4. Benjamin Davis & Paul Winters & Thomas Reardon & Kostas Stamoulis, 2009. "Rural nonfarm employment and farming: household‐level linkages," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 119-123, March.
    5. Zezza, Alberto & Davis, Benjamin & Azzarri, Carlo & Covarrubias, Katia & Tasciotti, Luca & Anríquez, Gustavo, 2008. "The impact of rising food prices on the poor," ESA Working Papers 289027, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    6. Benjamin Davis & Paul Winters & Gero Carletto & Katia Covarrubias & Esteban Quinones & Alberto Zezza & Kostas Stamoulis & Genny Bonomi & Stefania DiGiuseppe, 2008. "Rural Income Generating Activities : A Cross Country Comparison," World Bank Publications - Reports 9198, The World Bank Group.
    7. Benjamin Davis & Paul Winters & Gero Carletto & Katia Covarrubias & Esteban Quinones & Alberto Zezza & Kostas Stamoulis & Genny Bonomi & Stefania DiGiuseppe, 2007. "Rural Income Generating Activities; A Cross Country Comparison," Working Papers 07-16, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    8. Dil Bahadur Rahut Chhetri & Pradyot Ranjan Jena & Akhter Ali & Bhagirath Behera & Nar Bahadur Chhetri, 2015. "Rural Nonfarm Employment, Income, and Inequality: Evidence from Bhutan," Asian Development Review, MIT Press, vol. 32(2), pages 65-94, September.
    9. Maja Micevska & Dil Bahadur Rahut, 2008. "Rural Nonfarm Employment and Incomes in the Himalayas," Economic Development and Cultural Change, University of Chicago Press, vol. 57(1), pages 163-193, October.
    10. Bezu, Sosina & Holden, Stein, 2014. "Are Rural Youth in Ethiopia Abandoning Agriculture?," World Development, Elsevier, vol. 64(C), pages 259-272.
    11. Nagler, Paula & Naudé, Wim, 2014. "Non-Farm Entrepreneurship in Rural Africa: Patterns and Determinants," IZA Discussion Papers 8008, Institute of Labor Economics (IZA).
    12. Paul Conal Winters & Vera Chiodi, 2011. "Human Capital Investment And Long‐Term Poverty Reduction In Rural Mexico," Journal of International Development, John Wiley & Sons, Ltd., vol. 23(4), pages 515-538, May.
    13. Hoang, Trung X. & Pham, Cong S. & Ulubaşoğlu, Mehmet A., 2014. "Non-Farm Activity, Household Expenditure, and Poverty Reduction in Rural Vietnam: 2002–2008," World Development, Elsevier, vol. 64(C), pages 554-568.
    14. Francesca Marchetta, 2008. "Migration and non farm activities as income diversification strategies: the case of Northern Ghana," Working Papers - Economics wp2008_16.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    15. Davis,Benjamin K. & Di Giuseppe,Stefania & Zezza,Alberto & Davis,Benjamin K. & Di Giuseppe,Stefania & Zezza,Alberto, 2014. "Income diversification patterns in rural Sub-Saharan Africa : reassessing the evidence," Policy Research Working Paper Series 7108, The World Bank.
    16. 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.
    17. 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.
    18. Winters, Paul C. & Corral, Leonardo & Gordillo, Gustavo, 2001. "Rural Livelihood Strategies and Social Capital in Latin America: Implications for Rural Development Projects," Working Papers 12947, University of New England, School of Economics.
    19. Justin van der Sluis & Mirjam van Praag & Wim Vijverberg, 2003. "Entrepreneurship Selection and Performance," Tinbergen Institute Discussion Papers 03-046/3, Tinbergen Institute, revised 24 Sep 2004.
    20. Tuyen, Tran Quang, 2013. "Farmland and peri-urban livelihoods in Hanoi, Vietnam: evidence from household survey data," MPRA Paper 60847, University Library of Munich, Germany, revised 19 Dec 2014.

    More about this item

    Keywords

    Agricultural and Food Policy; Community/Rural/Urban Development;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

    Statistics

    Access and download statistics

    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:ags:faoaes:289028. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/faoooit.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.