The determinants of non-farm income diversification in rural Ethiopia

Prowse, Martin (2015) The determinants of non-farm income diversification in rural Ethiopia. Journal of Poverty Alleviation and International Development, 6 (1). pp. 109-130.

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Abstract

Diversification has long been viewed as a risk minimization strategy in the face of increasing climatic and economic risks in developing countries. This paper examines the determinants of non-farm income diversification in rural Ethiopia for a four-wave panel of 1240 households from the Ethiopian Rural Household Survey over the period 1994–2009. The paper makes a conceptual distinction between non-farm and off-farm income and uses fixed and random-effects models to control for unobserved characteristics. The results suggest that the variables that determine non-farm diversification consumption per capita and livestock holdings—belong to pull factors and reflect a strategy by wealthier households. Coupled with instrumental variable estimations to ascertain the direction of causality, these findings lend support to the argument that the main motivation for increasing non-farm diversification is likely to be accumulation.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of International Development
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Depositing User: LivePure Connector
Date Deposited: 21 Jul 2020 01:37
Last Modified: 31 Aug 2020 23:54
URI: https://ueaeprints.uea.ac.uk/id/eprint/76193
DOI:

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