Household Diversification Research Articles

Strategic Asset Allocation in Japan: An Empirical Evaluation

This research seeks to provide a comprehensive picture of lifetime asset allocation in Japan. We evaluate patterns in the level and composition of assets by household type, taking account of home ownership and household claims on social security as well as financial assets and pensions. The analysis relies on a micro-data taken from the RADAR survey fielded by Nikkei, for the year 2000. The RADAR data are the only publicly available dataset to record financial asset holdings in any detail, with which we calculate housing equity as well as other forms of wealth. We supplement this with external information on pension and social security entitlements. The resulting picture attests to the importance of housing and social security in the portfolios of households approaching retirement. As well, we compare asset allocation patterns between those who are worse vs. better off, better vs. worse educated, married couples vs others, and dualearner vs. single earner couples. Our econometric analysis of asset allocation choice reinforces priors regarding Japanese lifecycle asset allocation patterns: households do invest conservatively, other than their family home; they are risk-averse in their allocation of financial assets; and they appear to over-invest in housing and life insurance, two assets which enjoy preferential bequest tax treatment. We argue that institutional, historical, and policy influences explain much of observed Japanese preferences for safe financial assets, and we offer suggestions for mechanisms that could increase household diversification.

Migration, crop production and non-farm labor diversification in rural Vietnam

This article examines the impacts of migration with and without remittances on crop productivity growth , crop diversification, and non-farm labor diversification of rural households in Vietnam. We use village fixed-effects regression models for a panel data set of about 2,000 rural households collected in 2007, 2008 and 2010 in three rural provinces. The findings demonstrate that rural households who receive remittances from their migrants reduce the share of their income from rice, increase their land productivity and become more specialized in non-farm labor allocation. However, migration without remittances decreases farm labor productivity growth and crop diversification of rural households.

Fishers’ Livelihood Diversification in Bhagirathi–Hooghly Stretch of Ganga River in India

For the resource-poor fishers, livelihood diversification is a strategy to cope with the uncertainties and inadequateness of fisheries as a profession. The present study is an attempt to assess the socioeconomic conditions together with livelihood diversification of fishermen households of the Bhagirathi– Hooghly stretch of Ganga River. Data were collected by personally interviewing 500 fishermen from Sagar to Farakka (560 km stretch) in West Bengal using survey schedules in 2016. Analysis of data indicated that the socio-economic conditions of fishermen households were not encouraging. Fishing is the main occupation of around 88.60% of fishers and overall, fishing contributes about 70.30% to the total income of the family. Average number of income-generating activities per household ranged from 1.43 in the lower stretch to 1.79 in the upper stretch. Further, it was found that not only the average household income and number of income sources were limited, their level of diversification was also quite low. The monthly income of a household was found to be Rs 9391. The income is higher in the lower stretch because of higher catch and high value fish in the catch. Fishery as an only profession is unable to provide a decent life. The study also revealed that among other factors, the Simpson index contributes positively and significantly towards per capita income of the fisher households. However, in the absence of suitable alternative opportunities, the resource is under pressure. Government needs to develop appropriate strategies to facilitate successful livelihood diversification. Facilities may be created for non-fishing activities like fish marketing kiosks, cloth weaving facilities, agro-processing in fruit orchard areas, e-rickshaws and so on. Fishers may be trained in other income-generating activities like carpentry, embroidery, dress making, driving, etc. for better livelihood.

English

Rural households have different asset endowments and they either specialize in single activity or choose to earn both from farm and nonfarm activities. The study constructs Hirchman-Herfindahl Index to evaluate the household income diversification by employing survey data for rural household from Pakistan for the periods 2001-02 and 2010-11. The study estimated the determinants of household diversification by employing logit, linear and censored regression models. Our results showed that agricultural assets including landholding and livestock ownership negatively affect the income diversification. On the other hand, human capital development through education and female participation increased the household employment diversification. The households having access to transport and formal credit choose to diversify while the impact of access to road and information was found insignificant. The results also suggests the development of nonfarm sector by investing in commuting infrastructure and human capital to ensure sustainable incomes of rural households

Determinants of livelihood diversification among farm households in Akamkpa Local Government Area, Cross River State, Nigeria

The study examined the determinants of livelihood diversification of farm households in Akamkpa Local Government Area, Cross River State, Nigeria. The specific objectives were to describe the socio-economic characteristics of respondents in the study area, identifying the factors influencing farm household livelihood diversification as well as to identify the constraints to farm household livelihood diversification. A multistage sampling technique was used in sampling the respondents. A set of validated questionnaire were used to gather data for the study while a total of 60 respondents were selected. Data were analyzed with both descriptive and inferential statistics. The study revealed that the majority (60%) were female, aged 20-30years, married (46%) and literate. The majority of them had household size ranging from 4-7 persons, engaged in farming (61.7%) and diversified to non-farm income. The result also revealed that (70%) of the respondents did not have access to credit. The factors influencing livelihood diversification among the farm households were volume of credit received, household size, farm size and marital status.. More so, the major constraints to livelihood diversification among them were unstable electricity (78.3%), poor access to market (65%), insufficient market price of commodity (58.3%), inadequate access to loan (51.7%), inadequate skilled labour (51.7%), high cost of business premises (51.7%) and appreciation in tax rate (51.7%).. The study recommends improved access to credit and strengthening of the credit institutional arrangement to improve the livelihoods of rural households. Keywords: Determinants, Farm, Households, Livelihood, Diversification

English

The livelihood diversification increases sources of income and smoothens consumption by promoting rural food security. In Ethiopia little attention has been given to livelihood diversification and the numerous factors that determine the abilities of rural household‘s choice of different livelihood activities. Thus, the objective of this study is to generate location specific data regarding the livelihood diversification and its role in attaining household‘s food security. A multi-stage sampling technique was used to select 191 sample households, by undertaking structured questionnaire to obtain data pertaining to livelihood diversification and its implication to food security during the year of 2016. Additionally, key informant interview, focus group discussion and observation were the principal methods used to generate data. Descriptive statistics and ordered logit regression model were used to analyze quantitative data. The result of ordered logit model showed that education level of household-head, land size of household, annual income of household head, membership of households in the organization, credit utilization, and access of extension services were significant in determining the livelihood diversification of households in the study area. On the other hand, while age and family size of households were found to be negatively correlated (P<0.5) and related to household level of livelihood diversification. Moreover, the findings of this study gave insight into factors affecting livelihood diversification and its importance to food security. Therefore, government should promote livelihood diversification in order to promote food security in the area. Key words: Education level, household size, livelihood diversification, ordered logit model, rural households.

The determinants and purpose of income diversification of rural households in Bangladesh

This study determines the factors that affect the nature and extent of household income diversification in Bangladesh. The study also investigates whether the motivation for diversification was to support asset accumulation or survival. The findings show that the extent of the diversification index is determined by household endowments of assets such as wealth, a higher number of earners, higher education, easy access to market, and better infrastructure. The motive for overall diversification was accumulation, not survival. An interesting finding was that off-farm income diversification serves a two-fold purpose. Wealthier households are attracted into off-farm self-employment to get a higher return facilitated by easy access to financial assets, and labour endowment. Credit constrained poor households are influenced by endowment in the form of education and labour to diversify into off-farm wage activities as a mean of survival. Investment in infrastructure, electrification and education does and will support income diversification in Bangladesh.

The determinants and purpose of income diversification of rural households in Bangladesh

This study determines the factors that affect the nature and extent of household income diversification in Bangladesh. The study also investigates whether the motivation for diversification was to support asset accumulation or survival. The findings show that the extent of the diversification index is determined by household endowments of assets such as wealth, a higher number of earners, higher education, easy access to market, and better infrastructure. The motive for overall diversification was accumulation, not survival. An interesting finding was that off-farm income diversification serves a two-fold purpose. Wealthier households are attracted into off-farm self-employment to get a higher return facilitated by easy access to financial assets, and labour endowment. Credit constrained poor households are influenced by endowment in the form of education and labour to diversify into off-farm wage activities as a mean of survival. Investment in infrastructure, electrification and education does and will support income diversification in Bangladesh.

Rethink the interlink between land degradation and livelihood of rural communities in Chilga district, Northwest Ethiopia

BackgroundEthiopia is among the poorest countries where land degradation caused livelihood problem to its inhabitants. The livelihood of rural communities in Ethiopia is seriously threatened by land degradation. Land is the major natural resource that economic, social, infrastructure, and other human activities are undertaken on. Thus, land resources play an important role in shaping rural livelihoods, and lack of sustainable land management practices leads to land degradation. Thus, this study aimed to analyze interlink between land degradation and livelihood of rural communities in Chilga district, Northwest Ethiopia. It also addresses the factors which influence income diversification for livelihood of households in the study area.ResultThe result depicts that the major causes of land degradation are both natural and anthropogenic. Land degradation and livelihood are negatively interlinked with each other. The livelihood of the majority of the population in the study area is dependent on subsistence agriculture both farming and animal husbandry with low diversification. The survey result showed that more than half (69%) of the sample households have farm size of less than 2 ha, nearly one third (31%) have 2.0–2.5 ha, and insignificant number of farmers have more than 2.5 ha. More than 80% of the respondents pointed out that land degradation has impacts both on crop yield and livestock production. Most of the explanatory variables such as gender, age, education level, farmland size, and family size have statistical significant influence (at P < .01 and P < .05 levels) for income diversification of households, while marital status on the other hand is not statistically significant though it has positive relation with income diversification in this study.ConclusionsOur results suggest awareness should be created in the community about the livelihood diversification mechanisms which enabled them to engage in different income-generating activities and comprehensive watershed management should be implemented.

Determinants of livelihood diversification: The case wildlife tourism in four coastal communities in Oaxaca, Mexico

Diversification is a process by which households increase the number of economic activities in different sectors to improve their well-being and chance of survival. The aim of this research is to study the determinants of livelihood diversification with a specific emphasis on wildlife watching in the coastal communities of Oaxaca, Mexico. Based on household surveys, two econometric models were used to examine the differences regarding the asset determinants for those households increasing the number of economic activities and those involved in wildlife tourism. The results reveal four common variables distributed between capitals and specify that average household age, environmental consciousness, characteristics of the land, membership or participation in an organization (cooperative) and government transfers are determinants of a household's diversification into wildlife tourism. Policy recommendations include focusing on households with young people, providing support for social capital and policy coherence to guarantee basic needs and tourism planning design.

Do Non-farm Enterprises Offer Pathways for Upward Mobility in Rural Pakistan? Evidence from Panel Dataset

This study has analysed the dynamics of rural non-farm enterprises and their role in employment provision, equity enhancement and poverty alleviation in Pakistan. Multiple data sources have been used including cross-sectional and panel datasets. The results show that majority of the rural non-farm enterprises in Pakistan are micro-enterprises with only a limited share in manufacturing. They are informal and have poor forward and backward linkages and high closure rate. Despite the poor asset base, they are providing jobs to more than half of the rural population, contributing to reduction in poverty and equity enhancement among the rural masses. Rich households own enterprises and poor households gain employment from non-farm enterprises. Non-farm economy has a significant impact in reducing multiple deprivations and also has a significant positive impact in pulling households out of poverty with the passage of time. Pakistan, being a country where most of the population is still residing in rural areas and where rural land is not equitably distributed; such non-farm activities are highly important not only to tackle the ongoing food security challenges but also for resource diversification of households. JEL Classification: I32, J21, J43, O14, Q10, R11 Keywords: Rural Development, Non-farm Sector, Employment, Poverty, Multidimensional Poverty

Development Impacts of International Migration on “Sending” Communities: The Case of Rural Kyrgyzstan

This paper analyzes the impacts of international migration and remittances on different sources of income in rural Kyrgyzstan. Based on a household dataset from the Life in Kyrgyzstan panel survey of 1012 rural households, we estimate equations for crop income, livestock income, and nonagricultural income jointly in a system using the seemingly unrelated regressions (SUR) and general method of moments (GMM) three-stage least-squares (3SLS) estimators. Our results show that international migration had diverse effects on different sources of rural income in Kyrgyzstan. The effect of international migration in total was negative on crop income, but positive on livestock income and mixed for nonagricultural income. The positive effect of remittances on nonagricultural income implies that migration can promote diversification of rural households’ income sources. This in turn is associated with less income uncertainty and risk in the future and can provide a positive contribution to the economic development of a migrant-sending community.

Land fragmentation and production diversification: A case study from rural Albania

We analyze the impact of land fragmentation on production diversification in rural Albania. Albania represents a particularly interesting case for studying land fragmentation as the fragmentation is a direct outcome of land reforms. The results indicate that land fragmentation is an important driver of production diversification of farm households in Albania. We find that land fragmentation stimulates significantly more diversification for subsistence farm households than for market-oriented households. Our findings have two key policy implications: (i) the consolidation policies that relocate and enlarge plots would have a significant impact on reducing agricultural production diversification; and (ii) land fragmentation contributes to the nutritional security improvement by increasing the variety of foodstuffs produced by subsistence farm households.

Does International Migration Affect Labor Supply, Non‐farm Diversification and Welfare of Households? Evidence from Egypt

AbstractThis study examines the effect of international migration in Egypt using fixed‐effect regressions and panel data from Egypt Labour Market Panel Surveys in 2006 and 2012. We find that men and people with higher education are more likely to migrate than women and people with lower education. Middle‐aged people are also more likely to migrate than young or old people. International migration does not seem to affect the overall employment of remaining members of migrant‐sending households. However, it tends to increase the self‐employed work of members of migrant‐sending households. Finally, international migration also helps migrant‐sending households increase their wealth index. Remittances are used to improve living conditions (housing) and purchase more assets and durables. This finding supports the theory as well as the policy to increase migration as a way to stabilize consumption and reduce poverty in low income countries.

Is Household Diversification Increasing in Wealth? Norwegian Evidence

We study the diversification properties of equity portfolios using data on all Norwegian households with equity investments. While households typically have undiversified equity portfolios, diversification is increasing in wealth.

Interaction between Migration and Development

While agrarian stress has become a long-term phenomenon in the developing countries like India and land is likely to lose its importance as a determinant of wealth and power in rural areas, households are coping, adapting and securing their livelihood through diversification into non-agricultural activities. The study is aimed to understand the process of out-migration and income diversification of households in rural areas. It is based on the primary survey of a block of an underdeveloped region like the state of Bihar in north India. The study based on field experiences shows that the size of agricultural economy has become very small and it can hardly support the household economy while the expenditure is increasingly diversifying and household needs more income in cash. Households are adapting to the situation by using their available young male labour force, deploying them at different locations and earning remittances.

Income Diversification of Rural Households in Pakistan

This article explores diversification patterns among rural households of Pakistan. Using logistic regression analysis of data from Pakistan Rural Household Panel Survey, the relationship of household characteristics, asset endowments and facilitating policy with the choice of diversification of income portfolios is analyzed. The econometric analysis reveals that physical and human capital plays a significant role in defining a household’s choice of diversification; information access and growth of infrastructural facilities, however, remain insignificant. These results when compared with those for countries like China reveal significant similarities. The article presses the need for a significant thrust to rural non-farm economy in the policy design; with greater emphasis on network formation and development in human capital, to enable rural households to benefit from improvements in rural infrastructure.

Identifying the Determinants and Extent of Crop Diversification at Household Level: An Evidence from Ukhrul District, Manipur

Crop diversification is a risk management strategy for the farming community and an important step for poverty alleviation and transition from subsistence to commercial agriculture. The paper aims to recognize those factors which influence household decision to crop diversification and further attempts to identify what factors influence the degree to which this diversification takes place. The study adopts, Heckman's Two Stage Model to estimate separately the determinants of household diversification decision and intensity of diversification by the households’. The results of the study found that education of the household head is found to have positive association with the level of crop diversification. The farming experience of the farmer is found to have positive influence only while taking decision to diversify crops. Access to plough has positively affected both the household's decision to diversify crop as well as level of crop diversification. Access to fertilizer and availability of irrigation has effect on propensity to diversify crops. Exposure to farming information by the households significantly affected level of diversification. Farmers who attend farming training regularly are more likely to diversify crop. The distance to the nearest market from homestead also positively affected crop diversification level.

Do fish scales matter? Diversification and differentiation in seafood commodity chains

Recent studies in the literature on fisheries trade have contrasted the challenges and opportunities associated with domestic and internationally oriented fish trade. We examine forms of domestic and international fish trade in a municipality of the Philippines to show the empirical complexities of how fish trade unfolds on the ground. We draw on insights from the literature in livelihoods to highlight how the debate on fisheries trade can benefit from closer attention to the social and economic context of fisher livelihoods. We argue that from the perspective of small-scale producers who are focused on maintaining diversified livelihoods across a range of fisheries, the distinctions between domestic and international fish trade blur locally, and are sometimes of limited relevance when assessing livelihood options and outcomes. Instead, a more important distinction for households is social differentiation based on ownership of fishing assets. We suggest that household asset characteristics strongly influence how households can access a broad range of fisheries (both domestically and internationally traded) that often co-emerge in rural areas of the Philippines. We argue that a better understanding of household diversification and differentiation provides a view of fisheries trade that is more closely aligned with the perspectives and priorities of local fishers, than a focus on whether such trade is (or should be) domestically or internationally oriented.

Gender and Policy Roles in Farm Household Diversification in Zambia

Many African governments, faced with low rural incomes and food security challenges, have developed input subsidy programs in order to enhance agricultural productivity. This paper adds to recent literature analyzing the effects of input subsidy programs and gender on crop diversification in Sub-Saharan Africa. We investigate the effect of Zambia’s input subsidy program on crop allocation patterns by gender. In relatively land abundant Zambia, we test both single-equation crop diversification index models and multivariate regression models of cropland allocation. Our study finds that input subsidies reduce crop diversification more in male-headed households than in female-headed households. Further, multivariate regression results confirm that this occurs because female-headed households expand maize acreage less in response to the input subsidy. These findings suggest that greater cropland diversification will be maintained if input subsidy programs are accompanied by loan programs and other assistance which support leadership roles for women in farm households.