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

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.


Editor(s):
Getnet, Alemu
Alemayehu, Seyoum
Alemu, Mekonnen
Eyob, Tesfaye
Gezahegn, Ayele
Diwan, Ishak
Issue Date:
2009-12
Publication Type:
Journal Article
DOI and Other Identifiers:
ISSN 1993-3681 (Other)
PURL Identifier:
http://purl.umn.edu/249684
Published in:
Ethiopian Journal of Economics, Volume 18, Number 1
Page range:
35-70
Total Pages:
116
JEL Codes:
D1; J2
Series Statement:
ETHIOPIAN JOURNAL OF ECONOMICS
VOLUME XVIII NUMBER 1 April 2009




 Record created 2017-04-01, last modified 2017-04-28

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