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Livelihoods and Farm Efficiency in Rural Georgia


  • Kelvin_Balcombe

    (Imperial College)

  • Dirk_Bezemer

    (University of Groningen)

  • Junior_Davis

    (University of Greenwich)

  • Iain_Fraser

    (Imperial College)


This paper contributes to the literature on the role of on rural livelihood strategies in rural growth and poverty reduction. It distinguishes between livelihood diversity strategies that contribute to sustainable growth in household incomes, and those that mainly have a 'coping' function. It suggests that typically, the contribution of livelihood diversity to growing household income is through relaxing dependence on credit for access to capital. In this scenario, livelihood diversity would lead to higher technical efficiency in agriculture via investment and thereby to higher household incomes. Survey data from Georgia are introduced and used to test these hypotheses using a Bayesian stochastic frontier approach. The findings are relevant to defining more clearly the scope and aims of policies to stimulate the rural non-farm economy in developing and transition countries.

Suggested Citation

  • Kelvin_Balcombe & Dirk_Bezemer & Junior_Davis & Iain_Fraser, 2005. "Livelihoods and Farm Efficiency in Rural Georgia," Development and Comp Systems 0502005, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:0502005
    Note: Type of Document - doc; pages: 16

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    References listed on IDEAS

    1. O'Donnell, Christopher J. & Coelli, Timothy J., 2005. "A Bayesian approach to imposing curvature on distance functions," Journal of Econometrics, Elsevier, vol. 126(2), pages 493-523, June.
    2. Koop, Gary & Osiewalski, Jacek & Steel, Mark F. J., 1997. "Bayesian efficiency analysis through individual effects: Hospital cost frontiers," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 77-105.
    3. Barrett, C. B. & Reardon, T. & Webb, P., 2001. "Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications," Food Policy, Elsevier, vol. 26(4), pages 315-331, August.
    4. Dashti, Imad, 2003. "Inference from concave stochastic frontiers and the covariance of firm efficiency measures across firms," Energy Economics, Elsevier, vol. 25(6), pages 585-601, November.
    5. Gary Koop & Mark F J Steel, 1999. "Bayesian Analysis of Stochastic Frontier Models," ESE Discussion Papers 19, Edinburgh School of Economics, University of Edinburgh.
    6. Tim Coelli & Sanzidur Rahman & Colin Thirtle, 2002. "Technical, Allocative, Cost and Scale Efficiencies in Bangladesh Rice Cultivation: A Non-parametric Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(3), pages 607-626.
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    More about this item


    Livelihoods analysis; survey data; incomes; efficiency; Bayesian stochastic frontier approach;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics

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