IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Households' income-generating activities and marginal returns to labor in rural Tanzania

Listed author(s):
  • Nerman, Måns


    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Registered author(s):

    This study uses detailed household-level data to investigate income and activity diversification among households in rural Tanzania. Unlike previous research on diversification, I explicitly evalutate marginal returns within different activities, aiming to assess whether households are able to allocate labor so as to maximize their incomes, and what factors determine if they do. The findings indicate that specialization in agriculture is not correlated with household welfare, and that agricultural wage work is a last resort option, as agricultural wage laborers also allocate labor to their own farms to such an extent that marginal returns in own farming become lower than among others. Furthermore, wage rates are much higher than the agricultural shadow wages, implying that there are gains to be made from expanding the non-farm side of the rural economy. However, there is no evidence that households are stuck in agriculture due to being constrained from entering the existing labor market. While I do not find preferences for own crops being important for labor allocation to farming, work preferences seem to play a role. There is also some evidence that both credit and social networks are important determinants of a household's probability of being stuck in low-return agriculture.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 547.

    in new window

    Length: 32 pages
    Date of creation: 23 Nov 2012
    Handle: RePEc:hhs:gunwpe:0547
    Contact details of provider: Postal:
    Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden

    Phone: 031-773 10 00
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:hhs:gunwpe:0547. 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: (Marie Andersson)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.