Is household income diversification a means of survival or a means of accumulation? Panel data evidence from Tanzania
What drives income diversification among rural households in developing countries? A large literature has examined whether household income diversification is a means of survival or a means of accumulation, which has so far remained inconclusive. This paper attempts to evaluate which explanation of household income diversification – diversification as survival or diversification as accumulation – stands up to empirical scrutiny. We use household panel data from Tanzania of approximately 800 households for four years and use fixed and random effects models to sweep out unobserved households’ attitudes to risk that may be correlated with household income diversification behaviour. We also use instrumental variable methods to address the possibility of reverse causality and that the household’s income status may be endogenous to its diversification behaviour. Our results suggest that the ‘diversification as accumulation’ motive of household income diversification seems to have stronger empirical validity in the Tanzanian context.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: Humanities Bridgeford Street, Oxford Road,Manchester, M13 9PL|
Phone: +44(0)7717 881567
Web page: http://www.gdi.manchester.ac.uk/
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.:
- Joachim De Weerdt, 2010. "Moving out of Poverty in Tanzania: Evidence from Kagera," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 331-349.
When requesting a correction, please mention this item's handle: RePEc:bwp:bwppap:12210. 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: (Rowena Harding)
If references are entirely missing, you can add them using this form.