Rural livestock asset portfolio in northern Ethiopia: A microeconomic analysis of choice and accumulation
Livestock of different species fulfill different functions. Depending on their livelihood strategies, households differ in their choice of type of animal to keep and accumulation of the chosen animal overtime. This paper investigates the dynamic behavior of rural households’ livestock holding to identify determinants of choice of type of animal households’ keep and accumulation of the chosen animals using a panel data of 385 rural households in a mixed farming system in northern Ethiopia. Dynamic behavior of choice is analyzed for a principal animal, an animal that constitutes the largest value of livestock assets a household possesses, using a multinomial logit model. A household that keeps oxen as a principal animal is considered the reference household. Results indicate that households differ in choice of type of animal they keep. Agro climatic conditions, sex and age of household head, the presence or absence of male household members and liquidity are the significant factors that determine type of principal animal households keep. Conditional on the principal animal selected, we have analyzed the factors that determine the accumulation of the chosen animals by correcting for selection bias. Size of land cultivated is the most significant factor that explains the size of animals households keep. Other factors include sex of household head, diversification into non-farm self employment and shocks.
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