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Boda bodas rule: Non-agricultural activities and their inequality implications in Western Kenya

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  • Lay, Jann
  • M'Mukaria, George Michuki
  • Omar Mahmoud, Toman

Abstract

Engagement in non-agricultural activities in rural areas can be classified into survival-led or opportunity-led. Survival-led diversification would decrease inequality by increasing the incomes of poorer households and thus reduce poverty. By contrast, opportunity-led diversification would increase inequality and have a minor effect on poverty, as it tends to be confined to non-poor households. Using data from Western Kenya, we confirm the existence of the differently motivated diversification strategies. Yet, the poverty and inequality implications differ somewhat from our expectations. Our findings indicate that in addition to asset constraints, rural households also face limited or relatively risky high-return opportunities outside agriculture.

Suggested Citation

  • Lay, Jann & M'Mukaria, George Michuki & Omar Mahmoud, Toman, 2007. "Boda bodas rule: Non-agricultural activities and their inequality implications in Western Kenya," Kiel Working Papers 1314, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1314
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    Cited by:

    1. Giesbert, Lena, 2007. "Seeking Opportunities: Migration as an Income Diversification Strategy of Households in Kakamega District in Kenya," GIGA Working Papers 58, GIGA German Institute of Global and Area Studies.
    2. Atamanov, Aziz & Van den Berg, Marrit, 2011. "Microeconomic analysis of rural nonfarm activities in the Kyrgyz Republic: What determines participation and returns?," MERIT Working Papers 2011-011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Lay, Jann & Schüler, Dana, 2008. "Income Diversification and Poverty in a Growing Agricultural Economy: The Case of Ghana," Proceedings of the German Development Economics Conference, Zurich 2008 39, Verein für Socialpolitik, Research Committee Development Economics.
    4. Madaki J. U & Dr. J. O. Adefila, 2014. "Contributions of Rural Non-Farm Economic Activities to Household Income in Lere Area, Kaduna State of Nigeria," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 4(5), pages 654-663, May.
    5. Liverpool, Lenis Saweda O. & Winter-Nelson, Alex, 2010. "Poverty Status and the Impact of Formal Credit on Technology Use and Wellbeing among Ethiopian Smallholders," World Development, Elsevier, vol. 38(4), pages 541-554, April.
    6. World Bank, 2009. "Kenya - Poverty and Inequality Assessment : Executive Summary and Synthesis Report," World Bank Publications - Reports 3081, The World Bank Group.

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    More about this item

    Keywords

    Non-agricultural activities; Poverty; Sub-Saharan Africa; Kenya; Inequality; Income diversification;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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