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Factors Affecting Rural Households’ Income Diversification: Case of Zoba Maekel, Eritrea
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Volume 4, 2016
Issue 2 (April)
Pages: 7-15   |   Vol. 4, No. 2, April 2016   |   Follow on         
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Ghirmai Tesfamariam Teame, Department of Economics, College of Business and Economics, Halhale, Eritrea.
Tesfa-Yesus Mehary Woldu, Department of Economics, College of Business and Economics, Halhale, Eritrea.
This paper examines the effects of internal and external factors on total household’s income through OLS method and the determinants of incomes earned from various income generating activities with the help of Tobit models, based on household level survey data from 4 villages in Zoba Maekel, Eritrea. The study revealed that ownership of irrigated and rain-fed area and livestock units; human capital; social capital; off-farm income and unearned income, have positive effect on total household income. Regarding activities income, income from any kind of wage-employment and non-agricultural wage-employment are negatively related with livestock possession. Probability of being male headed household has positive effect on income from non-agricultural wage-employment and any kind of wage-employment, while it has a negative effect on income from non-agricultural self-employment. The positive effects of: years of schooling of head of household on income from off-farm; adult members on income from non-agricultural self-employment and crop production; number of dependents on income from non-agricultural self-employment and off-farm employment; risk on income from all agricultural and non-agricultural wage-employments are documented. Furthermore, negative effects of distance to the nearest market on income from any kind of wage-employment and non-agricultural wage-employment are found. The results of the analyses are used to draw policy recommendations with respect to activity diversification and rural development which would assist in alleviating rural poverty.
Rural Non-farm, Off-Farm, Livelihood Diversification, Total Income, Activity Income, Eritrea, Zoba Maekel
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