IDEAS home Printed from https://ideas.repec.org/a/ags/eeaeje/249684.html
   My bibliography  Save this article

Determinants of Income Diversification in Rural Ethiopia: evidence From Panel Data

Author

Listed:
  • Adugna, Lemi

Abstract

The aim of this study is to examine the determinants of income diversification in rural Ethiopia. Rural households allocate their work time between farm and of-farm activities to have secure income (consumption) for their family members. However, it is not clear why some households participate only in farm activities while others engage in both. Using survey data collected from 1500 rural households in 1994 and 1997, this study investigates the impacts of demographic, economic, and risk factors on participation and intensity of off-farm activities. The results of the study show that families with high dependency ratio, female household heads, high livestock value, and poor quality of land participated less in off-farm activities. Competition between off-farm and farm activities and effects of seasonality were more apparent from the intensity results than from participation. Increased crop production and sale of part of production during the main harvest season led households to engage less in off-farm activities. The results also confirm that offfarm activities were practiced as a means of subsistence when crop production fails; otherwise farmers abandon off-farm activities.

Suggested Citation

  • Adugna, Lemi, 2009. "Determinants of Income Diversification in Rural Ethiopia: evidence From Panel Data," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 18(1), pages 116-116, December.
    • Handle: RePEc:ags:eeaeje:249684
    DOI: 10.22004/ag.econ.249684
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/249684/files/Adugna%20Lemi_Determinants%20of%20Income%20Diversification%20in%20Rural%20Ethiopia.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.249684?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ruben, Ruerd & Van den berg, Marrit, 2001. "Nonfarm Employment and Poverty Alleviation of Rural Farm Households in Honduras," World Development, Elsevier, vol. 29(3), pages 549-560, March.
    2. Smith, Davd Rider & Gordon, Ann & Meadows, Kate & Zwick, Karen, 2001. "Livelihood diversification in Uganda: patterns and determinants of change across two rural districts," Food Policy, Elsevier, vol. 26(4), pages 421-435, August.
    3. Deininger, Klaus & Olinto, Pedro, 2001. "Rural Nonfarm Employment and Income Diversification in Colombia," World Development, Elsevier, vol. 29(3), pages 455-465, March.
    4. 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.
    5. Lanjouw, Peter, 2001. "Nonfarm Employment and Poverty in Rural El Salvador," World Development, Elsevier, vol. 29(3), pages 529-547, March.
    6. Adugna Lemi, 2012. "Trade Liberalization and Change in Poverty Status in Rural Ethiopia: What are the Links?," International Economic Journal, Taylor & Francis Journals, vol. 26(4), pages 609-633, August.
    7. Yunez-Naude, Antonio & Edward Taylor, J., 2001. "The Determinants of Nonfarm Activities and Incomes of Rural Households in Mexico, with Emphasis on Education," World Development, Elsevier, vol. 29(3), pages 561-572, March.
    8. Tomoya Matsumoto & Yoko Kijima & Takashi Yamano, 2006. "The role of local nonfarm activities and migration in reducing poverty: evidence from Ethiopia, Kenya, and Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 449-458, November.
    9. Block, S. & Webb, P., 2001. "The dynamics of livelihood diversification in post-famine Ethiopia," Food Policy, Elsevier, vol. 26(4), pages 333-350, August.
    10. Deborah Bryceson, 1999. "African rural labour, income diversification & livelihood approaches: a long‐term development perspective," Review of African Political Economy, Taylor & Francis Journals, vol. 26(80), pages 171-189.
    11. Escobal, Javier, 2001. "The Determinants of Nonfarm Income Diversification in Rural Peru," World Development, Elsevier, vol. 29(3), pages 497-508, March.
    12. Abdulai, Awudu & CroleRees, Anna, 2001. "Determinants of income diversification amongst rural households in Southern Mali," Food Policy, Elsevier, vol. 26(4), pages 437-452, August.
    13. Thomas Reardon & Eric Crawford & Valerie Kelly, 1994. "Links Between Nonfarm Income and Farm Investment in African Households: Adding the Capital Market Perspective," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(5), pages 1172-1176.
    14. Marrit Van Den Berg & Girma Earo Kumbi, 2006. "Poverty and the rural nonfarm economy in Oromia, Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 469-475, November.
    15. Woldenhanna, T. & Oskam, A., 2001. "Income diversification and entry barriers: evidence from the Tigray region of northern Ethiopia," Food Policy, Elsevier, vol. 26(4), pages 351-365, August.
    16. Grace Carswell, 2002. "Livelihood diversification: increasing in importance or increasingly recognized? Evidence from southern Ethiopia," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(6), pages 789-804.
    17. Lanjouw, Peter & Quizon, Jaime & Sparrow, Robert, 2001. "Non-agricultural earnings in peri-urban areas of Tanzania: evidence from household survey data," Food Policy, Elsevier, vol. 26(4), pages 385-403, August.
    18. Frank Ellis, 2000. "The Determinants of Rural Livelihood Diversification in Developing Countries," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 289-302, May.
    19. Ellis, Frank, 2000. "Rural Livelihoods and Diversity in Developing Countries," OUP Catalogue, Oxford University Press, number 9780198296966, Decembrie.
    20. Stefan Dercon & Pramila Krishnan, 1996. "Income portfolios in rural Ethiopia and Tanzania: Choices and constraints," Journal of Development Studies, Taylor & Francis Journals, vol. 32(6), pages 850-875.
    21. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics, Blackwell, vol. 26(1), pages 1-23, October.
    22. Holden, Stein & Shiferaw, Bekele & Pender, John, 2004. "Non-farm income, household welfare, and sustainable land management in a less-favoured area in the Ethiopian highlands," Food Policy, Elsevier, vol. 29(4), pages 369-392, August.
    23. Reardon, Thomas, 1997. "Using evidence of household income diversification to inform study of the rural nonfarm labor market in Africa," World Development, Elsevier, vol. 25(5), pages 735-747, May.
    24. Barrett, Christopher B. & Bezuneh, Mesfin & Aboud, Abdillahi, 2001. "Income diversification, poverty traps and policy shocks in Cote d'Ivoire and Kenya," Food Policy, Elsevier, vol. 26(4), pages 367-384, August.
    25. Reardon, Thomas & Berdegue, Julio & Escobar, German, 2001. "Rural Nonfarm Employment and Incomes in Latin America: Overview and Policy Implications," World Development, Elsevier, vol. 29(3), pages 395-409, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Khan,Waseem & Tabassum, Shazia & Ansari, Saghir Ahmad, 2017. "Can Diversification of Livelihood Sources Increase Income of Farm Households? — A Case Study in Uttar Pradesh," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 30(Conferenc).
    2. Bekele Gebisa Etea & Deyi Zhou & Kidane Assefa Abebe & Dessalegn Anshiso Sedebo, 2020. "Is income diversification a means of survival or accumulation? Evidence from rural and semi-urban households in Ethiopia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(6), pages 5751-5769, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Adugna Lemi, "undated". "The Dynamics of Income Diversification in Ethiopia: Evidence from Panel data," Working Papers 3, University of Massachusetts Boston, Economics Department.
    2. Vellema, W. & Buritica Casanova, A. & Gonzalez, C. & D’Haese, M., 2015. "The effect of specialty coffee certification on household livelihood strategies and specialisation," Food Policy, Elsevier, vol. 57(C), pages 13-25.
    3. Olale, Edward & Nazli, Hina, 2010. "The Influence of Market Barriers and Farm Income Risk on Non-Farm Income Diversification," Annual Meeting, 2010, Denver Colorado, July 25-27 60915, Canadian Agricultural Economics Society.
    4. Bezu, Sosina & Barrett, Christopher B. & Holden, Stein T., 2012. "Does the Nonfarm Economy Offer Pathways for Upward Mobility? Evidence from a Panel Data Study in Ethiopia," World Development, Elsevier, vol. 40(8), pages 1634-1646.
    5. Bezu, Sosina & Holden, Stein, 2014. "Are Rural Youth in Ethiopia Abandoning Agriculture?," World Development, Elsevier, vol. 64(C), pages 259-272.
    6. Unai Pascual & Edward Barbier, 2005. "On- and off-farm labor decisions by slash-and-burn farmers in Yucatan (Mexico)," Environmental Economy and Policy Research Working Papers 06.2005, University of Cambridge, Department of Land Economics, revised 2005.
    7. Lay, Jann & Schüler, Dana, 2008. "Income Diversification and Poverty in a Growing Agricultural Economy: The Case of Ghana," Open Access Publications from Kiel Institute for the World Economy 39907, Kiel Institute for the World Economy (IfW Kiel).
    8. Riithi, Alexander Njuguna & Irungu, Patrick & Munei , Kimpei, 2015. "Determinants Of Choice Of Alternative Livelihood Diversification Strategies In Solio Resettlement Scheme, Kenya," Dissertations and Theses 269714, University of Nairobi, Department of Agricultural Economics.
    9. Gamel Abdul-Nasser Salifu, 2019. "The Political Economy Dynamics of Rural Household Income Diversification: A Review of the International Literature," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 273-290, December.
    10. Bezu, Sosina & Barrett, Christopher B., 2010. "Activity Choice in Rural Non-farm Employment (RNFE): Survival versus accumulative strategy," MPRA Paper 55034, University Library of Munich, Germany.
    11. Dil Bahadur Rahut & Akhter Ali & Menale Kassie & Paswel P. Marenya & Chudamani Basnet, 2014. "Rural Livelihood Diversification Strategies in Nepal," Poverty & Public Policy, John Wiley & Sons, vol. 6(3), pages 259-281, September.
    12. Van Nam, M. & Lensink, R., 2008. "Economic Development of the Mekong Delta in Vietnam," CDS Research Reports CDS-27, University of Groningen, Centre for Development Studies (CDS).
    13. Sosina Bezu & Christopher Barrett, 2012. "Employment Dynamics in the Rural Nonfarm Sector in Ethiopia: Do the Poor Have Time on Their Side?," Journal of Development Studies, Taylor & Francis Journals, vol. 48(9), pages 1223-1240, September.
    14. Junior Davis & Dirk Bezemer, 2005. "Key emerging and conceptual issues in the development of the rural non-farm economy in developing countries and transition economies," Development and Comp Systems 0510017, University Library of Munich, Germany.
    15. repec:dgr:rugcds:cds-27 is not listed on IDEAS
    16. Anviksha Drall & Sabuj Kumar Mandal, 2020. "Determinants of various modes of rural non-farm sector (RNFS) employment in SAT (semi-arid tropics) and Eastern regions of India: an empirical analysis," Indian Economic Review, Springer, vol. 55(2), pages 253-282, December.
    17. Chuan Liao & Christopher Barrett & Karim-Aly Kassam, 2015. "Does Diversification Improve Livelihoods? Pastoral Households in Xinjiang, China," Development and Change, International Institute of Social Studies, vol. 46(6), pages 1302-1330, November.
    18. Wassie Berhanu & David Colman & Bichaka Fayissa, 2007. "Diversification and livelihood sustainability in a semi-arid environment: A case study from southern Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 43(5), pages 871-889.
    19. Seidu, Ayuba & Onel, Gulcan & Moss, Charles B. & Seale, James L., 2016. "Do Off-farm Work and Remittances affect Food Consumption Patterns? Evidence from Albania," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235851, Agricultural and Applied Economics Association.
    20. Taruvinga, Amon & Mushunje, Abbyssinia, 2012. "Buffer zone income dynamics for the sub-district producer community: Implications for rural off-farm income, income inequality and the development of household agriculture," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126377, International Association of Agricultural Economists.
    21. Jan Fałkowski & Maciej Jakubowski & Paweł Strawiński, 2014. "Returns from income strategies in rural Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(1), pages 139-178, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eeaeje:249684. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eeaa2ea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.