Surry, Yves
- Department of Economics, Swedish University of Agricultural Sciences
Abstract
This article investigates how off-farm income affects crop output market participation decisions and marketed surplus of smallholder farmers in Ethiopia. A double-hurdle model is estimated using three waves of panel data from the Ethiopian Rural Household Survey. Unobserved heterogeneity is controlled for using a correlated random effect procedure and potential endogeneity of explanatory variables using a control function approach. The results show that off-farm income has no significant influence on household crop output market participation. However, conditional on market participation, additional off-farm earnings negatively affect the marketed surplus. This indicates that farmers use off-farm earnings for consumption rather than for investment in agricultural production. Policy measures that promote rural investment may help increase returns to labor for land-poor households participating in off-farm work in the process of agricultural commercialization.
Keywords
Double-hurdle; Endogeneity; Off-farm income; Smallholder commercialization; Ethiopia
Published in
Agricultural Economics
2017, volume: 48, number: 2, pages: 207-218
Publisher: WILEY
SLU Authors
Global goals (SDG)
SDG8 Decent work and economic growth
UKÄ Subject classification
Economics
Publication identifier
- DOI: https://doi.org/10.1111/agec.12327
Permanent link to this page (URI)
https://res.slu.se/id/publ/82668