entrepreneurship and income inequality in southern ethiopia this article uses inequality decomposition techniques in order to analyze the consequences of entrepreneurial activities to household income inequality in southern ethiopia a uniform increase in entrepreneurial income reduces per capita household income inequality this implies that encouraging rural entrepreneurship may be favorable for both income growth and income distribution such policies could be particularly successful if directed at the low income low wealth and relatively uneducated segments of the society

impact of off farm income on food security and nutrition in nigeria abstract while the poverty implications of off farm income have been analyzed in different developing countries much less is known about the impact of off farm income on household food security and nutrition here this research gap is addressed by using farm survey data from nigeria econometric analyses are employed to examine the mechanisms through which off farm income affects household calorie and micronutrient supply dietary quality and child anthropometry we find that off farm income has a positive net effect on food security and nutrition the prevalence of child stunting underweight and wasting is lower in households with off farm income than in households without using a structural model we also show that off farm income contributes to higher food production and farm income by easing capital constraints thus improving household welfare in multiple ways

economic mobility and poverty dynamics in developing countries this study provides an introduction to this special issue of the journal of development studies on economic mobility and poverty dynamics in developing countries in addition to providing a conceptual framework it outlines how the contributions fit into the extant literature a series of regularities emerge across these studies the poor consist of those who are always poor poor at all dates and those who move in and out of poverty with the latter group tending to be strikingly large such movements in and out of poverty are apparent when looking at poverty in either absolute or relative terms changes in returns to endowments can be a potent source of increased incomes finally seemingly transitory shocks can have long term consequences the study concludes by drawing out the policy implications of these regularities

non farm income household welfare and sustainable land management in a less favoured area in the ethiopian highlands a bio economic model has been calibrated to the socio economic and biophysical characteristics of a less favoured area in the ethiopian highlands land degradation population growth stagnant technology and drought necessitates development of non farm employment opportunities in the area the model has been used to assess the impact of improved access to non farm income on household welfare agricultural production conservation investments and land degradation in the form of soil erosion the model simulations indicate that access to low wage off farm income is restricted by lack of employment opportunities since households otherwise would have engaged in more off farm wage employment than observed the simulations show that better unconstrained access to low wage non farm income has a substantial positive effect on household income total agricultural production crop and livestock production and farm inputs used are reduced when access to non farm employment is improved and thus increases the need to import food to the area access to non farm income reduces farm households incentives to invest in conservation and this leads to more overall soil erosion and more rapid land degradation even though intensity of production is reduced special policies are therefore needed to ensure land conservation and to sustain local food production

diversification and livelihood sustainability in a semi arid environment a case study from southern ethiopia abstract this paper examines the recently growing adoption of non pastoral livelihood strategies among the borana pastoralists in southern ethiopia a large portion of the current non pastoral participation is in petty and natural resource based activities pastoral and crop production functions are estimated using the cobb douglas model to analyse the economic rationale behind the growing pastoralist shift to cultivation and other non pastoral activities the low marginal return to labour in traditional pastoralism suggests the existence of surplus labour that can gainfully be transferred to non pastoral activities an examination of the pastoralist activity choices reveals that the younger households with literacy and more exposure to the exchange system display a more diversified income portfolio preference the findings underscore the importance of human capital investment and related support services for improving the pastoralist capacity to manage risk through welfare enhancing diversified income po

sunk cost and entry exit decisions under individual transferable quotas why industry restructuring is delayed the paper shows that explicit modelling of sunk cost and a firm s entry exit decision in a traditional deterministic investment model may give an explanation of the slow transition to the optimal fleet structure following the introduction of individual transferable quotas itqs the analysis shows that the annual lease unit price of quota may be in a range where the long run fleet structure will not be attainable at once over time firms with zero gross investment as optimal behavior may leave the industry as the capital decays and over the transition period the optimal fleet structure prevails

employment dynamics in the rural nonfarm sector in ethiopia do the poor have time on their side abstract we study rural employment transitions in ethiopia between farming and both low and high return nonfarm employment we find that initial asset holdings and access to saving and credit are important factors for transition into high return rural nonfarm employment and that households participation in high return rural nonfarm activities is robust to their experience of health shocks however shocks that affect their wealth or liquidity may trigger descents into low return nonfarm employment on the other hand shocks that reduce agricultural income motivate transitions into high return rural nonfarm employment

the role of nonfarm income in coping with the effects of drought in southern mozambique to reduce their dependence on subsistence agriculture farm households in rural africa may diversify their income sources by participating in the nonfarm sector in years of drought nonfarm income can also be part of the coping strategies a multivariate sample selection model was used to analyze three years of data from a nationally representative household survey in mozambique the analysis was guided by the following three questions during a drought year 1 do households increase their participation in nonfarm activities 2 are poorer households as likely as others to participate in and benefit from nonfarm activities and 3 which factors are associated with higher nonfarm incomes the results suggest that households are more likely to engage in at least one nonfarm income generating activity during a drought year although poorer households are more likely to engage in nonfarm activities they are less likely to participate in nonfarm activities of high return the results suggest that policies reducing entry barriers e g improved road infrastructure micro credit schemes and livestock promotion programs and increasing education levels can facilitate income diversification thus allowing rural households to better cope with the effects of drought when designing polices care must be taken to avoid exacerbating income inequality by targeting measures toward poorer and female headed households

the impact of income diversification among fishing communities in western kenya abstract past studies have shown that fishing communities in developing countries are generally poor one potential strategy for reducing poverty among these communities is income diversification this study investigates the impact of income diversification on incomes of fishing communities living on the kenyan shores of lake victoria using four propensity score matching methods we find evidence that income diversification increases the incomes of fish workers the strongest impact appears to be among fishers fish enterprise employees and fish workers in the non export beach based on these results income diversification can be considered a poverty reduction strategy among fishing communities in western kenya

are some groups more vulnerable to macroeconomic shocks than others hypothesis tests based on panel data from peru abstract which socio economic groups are most vulnerable to welfare declines during a macroeconomic shock after clarifying the difference between poverty and vulnerability this paper presents an analytical framework and applies it to panel data from peru major findings are 1 households with better educated heads are less vulnerable 2 female headed households are no more vulnerable than male headed households 3 households with more children are more vulnerable 4 transfer networks that assist the poor in relatively stable periods do not protect them during a major shock unless they originate from outside peru and 5 peru s social security program is targeted neither to vulnerable nor to poor households but other transfer programs are better targeted

shocks consumption and income diversification in rural ethiopia abstract we present new evidence that households are unable to protect themselves from rainfall failure that occurs on average every five years in rural ethiopia however other less extreme rainfall variation and idiosyncratic shocks such as illness and crop pests do not impact significantly on consumption agricultural shocks impact negatively on farm income as expected however they also stimulate non agricultural earnings by an equivalent amount in the case of a covariate shock such as severe rainfall failure this smoothing mechanism may be ineffective and rainfall insurance or drought triggered safety nets could provide further protection

does eu enlargement increase agro food export duration this paper examines the impact of eu enlargement on agro food export performance across 12 new eu member states and five newly independent states in the eu markets covering the period 1999 to 2007 the performance is examined by duration of export and hazard model we find larger duration for the agro food exports from the new eu member states the results confirm gains from the eastward eu enlargement and governance on export increases and longer duration for exporting higher value added specialized consumer ready food and more competitive niche agro food products

illegal landings an aggregate catch self reporting mechanism to solve the problem of illegal landings this article proposes a new tax mechanism based on the regulator s own aggregate catch estimates and ex ante self reports of planned catch by fishermen we show that the mechanism avoids illegal landings while ensuring nearly optimal exploitation and generating nearly correct entry and exit incentives finally we simulate the mechanism for the danish cod fishery in kattegat to obtain a rough indicator of the size of the tax it turns out that the average tax payment as a percentage of profit is surprisingly low

rent capture in a rights based fishery abstract the paper compares four methods of rent capture in a fishery managed with individual transferable quotas using simulations from a unit profit function some theoretical properties of a quota rental charge profit charge lump sum charge and an ad valorem royalty are examined and then compared in simulations in terms of the distribution of profits distortions to the fishery the relative burden on fishers and flexibility to adjust to changes in the fishery

the dynamics of livelihood diversification in post famine ethiopia abstract based on data for almost 300 households this paper explores associations among income diversification household perceptions of livelihood risks and changes in consumption outcomes across two points in time in post famine ethiopia four key questions are addressed i to what extent did households emerging from the famine period with relatively higher income and calorie consumption levels also have a more diversified income base ii was higher income diversification in 1989 associated with higher income and consumption levels by 1994 iii which households increased their share of income from non cropping activities most during the inter survey years and iv did household heads perceive a lack of non farm income activities to be an important risk factor in famine vulnerability we find that wealthier households tended to have more diversified income streams those initially more diversified subsequently experienced a relatively greater increase in both income and calorie intake households with a greater concentration of assets were more likely to fall in their relative outcome ranking as were female headed households and initially less diversified households subsequently realized greater gains in income diversification we also find suggestive evidence that personal perceptions of risk factors guided subsequent diversification decisions

how product innovation in the north may immiserize the south a new look at the ricardian model with a continuum of goods abstract the paper proposes a theoretical model investigating the welfare consequences of technological shocks in a ricardian framework a la dornbush fisher and samuelson 1977 contrary to the existing literature the model incorporates a nonhomothetic demand function whose price and income elasticities are endogenously determined by technology nonhomothetic preferences are modeled as the result of the hierarchical consumption of luxury and necessity goods the nature of technical progress determines the consumption pattern and notably the magnitude of the substitution effect between necessities and luxuries the model is applied to the case of trade between two economies with different development levels it is shown in particular that the developing country can suffer a fall in utility as a result of technical progress in the developed country biased towards luxury goods this configuration depends on the size of the development gap and reflects the fact that southern goods are less attractive the higher the range of goods consumed this result suggests that there is an optimal level of development gap to avoid ldcs being harmed by technical progress in the north

trends in poverty and destitution in wollo ethiopia 1 abstract according to several studies poverty in rural ethiopia has fallen significantly since the early 1990s thanks to improved governance and economic liberalisation policies this paper presents several arguments that challenge this view the first questions the methodological foundations of the data from which these positive trends are derived we argue that the original sampling frame was too small and unrepresentative to provide a basis for extrapolating national poverty levels or trends the second argument questions the conceptual underpinnings of these studies poverty estimates based on levels of current consumption fail to allow for non income dimensions of wellbeing nor for confounding factors such as seasonality annual rainfall and food aid receipts the third strand considers alternative sources of data on changes in wellbeing in ethiopia recent qualitative studies report that the poor perceive themselves as poorer and more vulnerable than poverty headcount figures suggest finally we

diversification strategies and adaptation deficit evidence from rural communities in niger summary the paper provides fresh empirical evidence on the adaptation process in niger rural communities using original longitudinal socio economic panel data merged with granular geo referenced climatic information we identify the main drivers and impacts of crop and labor diversification which constitute two livelihood strategies on moderating the adaptation deficit in doing so we account for the interdependence between the two diversification practices and potential reverse causality between welfare outcomes and diversification behavior moreover we condition the impacts of diversification on different sections of the welfare distribution to capture potential non linear effects our results reveal that the diversification has positive and significant welfare impacts when most vulnerable households rely on it as an adaptation strategy to mid run climate variability and as a coping strategy to short run market shocks at the same time our results find lower but still positive impacts for well endowed households that are likely to diversify their activity portfolio given the very limited presence of policy support we conclude that the rural nigerien communities are characterized by a large and autonomous adaptation response which constitutes a key leverage mechanism for policy makers we thus suggest government interventions aimed at supporting the most important diversification drivers but also aimed at straightening some channels such as network infrastructures or the promotion of local crop varieties which may have a greater potential in triggering diversification

private property and economic efficiency a study of a common pool resource abstract the british columbia halibut fishery provides a natural experiment of the effects of privatizing the commons using firm level data from the fishery 2 years before private harvesting rights were introduced the year they were implemented and 3 years afterward a stochastic frontier is estimated to test for changes in technical allocative and economic efficiency the study indicates that 1 the short run efficiency gains from privatization may take several years to materialize and can be compromised by restrictions on transferability duration and divisibility of the property right 2 substantial long run gains in efficiency can be jeopardized by preexisting regulations and the bundling of the property right to the capital stock and 3 the gains from privatization are not just in terms of cost efficiency but include important benefits in revenue and product form

rural livelihood diversification in sub saharan africa a literature review abstractthis article provides a comprehensive review of the literature on the nature and evolution of rural livelihood diversification in sub saharan africa and the situation regarding smallholders it reveals mixed findings about the causes and consequences of livelihood diversification on rural smallholders adopting this strategy a lot of evidence from the literature suggests that it is relatively better off smallholders with sufficient assets who achieve successful livelihood diversification mainly by exploiting opportunities and synergies between farm and nonfarm activities because of asset constraints increase in incomes and wealth based on livelihood diversification has not yet benefitted the large majority of smallholders

does the nonfarm economy offer pathways for upward mobility evidence from a panel data study in ethiopia summary empirical studies across many developing countries routinely document a positive correlation between participation in rural nonfarm employment and households wealth or income this paper explores whether nonfarm employment leads to higher consumption expenditure growth in ethiopia we find that 1 households consumption expenditure growth is positively correlated with the initial share of nonfarm income 2 the growth elasticity of nonfarm income share is higher for wealthier households and 3 the main source of growth for nonfarm participants comes from the higher rates of return participants enjoy on their human and physical capital

intellectual property rights foreign direct investment and industrial development this paper develops a north south product cycle model in which innovation imitation and the ow of fdi are all endogenously determined in the model a strengthening of ipr protection in the south reduces the rate of imitation and it increases the ow of fdi indeed

paying for pollution permits and charges tradeable emission permits are becoming an increasingly important instrument for controlling emissions for a variety of reasons emission permits are often allocated gratis conferring a windfall gain on the first generation of permit holders this paper examines how a regulator may capture this rent four different methods of rent capture profit output and input charges and an emission permit rental charge are compared with respect to their effects on efficiency and the relative burden placed on cleaner and dirtier firms in addition to generating revenue for the regulator certain charges coupled with emission permits may result in a better instrument than permits alone

peasant household behaviour with missing markets some paradoxes explained a model of peasant household behavior under varying degrees of household specific food and labor market failures is constructed to show that these structural features can explain several well known patterns of peasant response which have often been attributed to peculiar motives presumed specific to peasants the model explains sluggish response to cash crops prices and high instability in perceived food and labor scarcities the key role of manufactured consumer goods prices in stimulating peasants effort in cash crops production the effectiveness of taxation as opposed to incentives in stimulating cash crops production and the key role of technological change in food production to enhance cash crop production results are obtained analytically in the case of one market failure and by numerical simulation with more than one

the production life cycle tasks in production have different dynamics in comparison with individual products we build a general equilibrium model where three forces offshoring learning and wage interact to determine how production fragmentation evolves over time we show that the production process follows a life cycle its fragmentation emerges deepens and converges our model is stylized and versatile which can be used to tractably characterize the loci of global output productivity welfare and value added distribution as production fragmentation progresses this article is protected by copyright all rights reserved

determinants and effects of income diversification amongst farm households in burkina faso using four years of household data from three agroecological zones in burkina faso sahelian sudanian and guinean the article examines the determinants and effects of household income diversification harvest shortfalls and terms of trade are found to drive diversification but land constraints do not income diversification is associated with higher incomes and food consumption and more stable income and consumption over years

marketable emission permits efficiency profitability and substitutability research on marketable emission rights as a mechanism for controlling pollutants in the environment has intensified in recent years the resurgence of interest in this mechanism is in no small measure due to the 1990 amendments of the u s clean air act which introduced the most comprehensive tradeable permit scheme to date for s02 emissions canada is also flirting with the possibility of following suit with for instance the government of ontario now allowing ontario hydro to conduct some limited emissions trading across its plants nera 1992 however the literature often ignores two basic questions how permits are allocated and what substances should be covered by the permits there are two ways of allocating pollution permits by selling them e g by auction or by giving them away the advantages of auctions are that they can generate sizeable revenues for the regulator and they conform to the widely endorsed principle of polluter pays a frequently cited problem with auctions however is that they impose immediate financial burdens on emitting firms in the absence of perfect capital markets these burdens erect a formidable entry barrier to new and existing firms thus permits are usually freely distributed on the basis of historical market share however by allocating permits gratis policy makers are ignoring both the important polluter pays principle as well as an important source of revenue generation for example should emission permits be used to reduce nitrogen oxide emissions in accordance with recent canadian government proclamations the total value of these permits in ontario alone could be as much as c 300 million nera 1992 in this paper we examine the effects on efficiency and the burden imposed on heterogeneous firms from rent capture when permits are allocated gratis

poverty and the rural nonfarm economy in oromia ethiopia the rural nonfarm sector has gained increasing importance not only in asia but also in africa it is however widely believed that in most parts of africa the growth of the nonfarm economy has increased inequality and has had a limited effect on the poor who face entry barriers to nonfarm activities the present article analyzes the relation between nonfarm income poverty and inequality in oromia ethiopia we use two complementary methodologies i econometric estimates of household income from the nonfarm sector and ii a gini decomposition of analysis income inequality by source the results consistently indicate that in oromia entry barriers to nonfarm activities is low and the general growth of the sector will benefit the poor

china s booming livestock industry household income specialization and exit china s production of livestock products has generally kept pace with her rapidly increasing demand over supply and market corrections for various livestock products took place over the latter part of the 1990s and large numbers of householders exited this type of production using household survey data we estimate the relationship between a household s specialization in livestock production and household net income in 1995 and use a logit model to explore some predictors of household exit from livestock production over the following decade of market instability we conclude that specialist livestock households with access to necessary skills technologies and markets increase their incomes from further livestock specialization in the base year whereas those to whom livestock production is relatively unimportant can increase household incomes by diverting their resources away from animal husbandry it was specialist rather than diversified livestock households that tended to bear the brunt of the adjustment to unfavorable price movements over the decade post 1995 policy concerns include the exit of larger scale specialized producers who tended to earn relatively high household incomes in 1995 barriers to the effective formation and operation of horizontal and vertical integration options to help mitigate market instability the further development of insurance programs and markets for livestock producers and development assistance to livestock households that for various reasons cannot increase scale and specialization

experiences with individual transferable quotas an overview i introduction rights based management in fisheries is based on the allocation and enforcement of property rights in the form of access and use rights individual transferable quotas itqs allocate the total allowable catch among fishers in the form of individual harvesting rights in contrast to traditional regulations itqs operate on the principle that incentives rather than controls should be used to manage a fishery theoretically if itqs command a positive price fishers will take into account a share of the externality imposed on others provided that they are perceived as an exclusive and durable property right it can be shown analytically that itqs will not maximize the net return in a fishery given the existence of stock or congestion externalities but they should lead to a superior outcome compared to open access boyce 1992 this paper addresses the question of whether itqs have achieved the benefits often attributed to them il experiences with itqs itq programmes have been implemented in a number of fisheries in several countries including canada iceland australia and new zealand these programmes are evaluated to determine whether itqs have led to changes in employment and harvesting shares a reduction in fishing effort or an increase in profitability 1 reduction in fishing effort one of the expected benefits of itqs is that they can reduce the excess capital employed in a fishery depending upon the fishery and the potential opportunities in alternative activities the removal of excess harvesting capacity may involve an adjustment period of several years grafton 1994 provides a listing of the changes in vessel numbers in selected rights based

transferable quotas enforcement costs and typical firms an empirical application to the norwegian trawler fleet an alternative to traditional regulations of fisheries to avoid rent dissipation is the use of individual transferable quotas itqs where prices in the quota market provide the necessary information to owners of harvest rights to contract with each other however even under such a decentralized regime information on the underlying technology of the fishing vessels is also necessary first since most fisheries consist of many interrelated production processes in order to avoid rent dissipation by discarding wrong output mix etc the structure of production in the multispecies fishery must be known to design a proper quota system second an itq system may create incentives for misreporting by understating the actual catch this may especially be the case where the expected degree of self enforcement is low the paper proposes a way to reduce the information requirements under regulation with asymmetric information by constructing a typical firm and comparing performance for the other vessels to this firm based on the typical firm and if the industry is relatively homogenous the performance and hence catch of any other firm in the industry can be predicted within a certain range further the paper applies this idea to the norwegian trawler fleet to assess the production structure in terms of jointness input output separability and the supply and demand elasticities for the fishing firms this information characterizes the fishery and thus how the quota system may be designed and how to construct a yardstick in order to reduce the enforcement cost under a decentralized regulation of itqs

measures of welfare effects in multiproduct industries the case of multispecies individual quota fisheries a framework is developed to measure the welfare effects of individual quota reforms in multiproduct industries using the multimarket welfare measure techniques suggested by just hueth and schmitz 1982 and the concept of virtual price in the production theory literature neary 1995 squires and kirkley 1996 under joint in input production it is shown that quasirent under a single quota can be measured by the producer surplus either in the output market for quota output or in the quota market under multiple quotas the welfare effects of quota policies can be measured in one of the quota markets using inverse derived equilibrium demand curves these results are obtained for a joint in input technology where positive production of at least one of the quota outputs is necessary for the firm to continue to operate application of the inverse derived demand functions for welfare measurement is shown for both transferable and nontransferable quotas

income portfolios in rural ethiopia and tanzania choices and constraints the article analyses the different income portfolios of households using survey data from rural ethiopia and rural tanzania it suggests that the different portfolios held by households cannot be e

nonfarm employment and rural welfare evidence from the himalayas the potential importance of nonfarm employment for the welfare of rural households has long been recognized but whether the nonfarm sector offers prospects for improving the welfare of the rural poor remains a contentious issue we examine distributional and well being effects of nonfarm employment of rural households in the himalayas we account for heterogeneity of nonfarm employment and estimate a system of structural equations to better understand the causal linkages between nonfarm employment and household well being the results confirm that disaggregating nonfarm employment activities matters for understanding the relationship between nonfarm employment and rural welfare while low return nonfarm employment is associated with lower income inequality high return nonfarm activities have a disequalizing effect on the distribution of household incomes we also find that the ability to engage in high return nonfarm activities is associated with higher economic well being poor households on the other hand tend to rely on low return activities that do not contribute to improved well being

multi output nonfrontier primal measures of capacity and capacity utilization this article implements an econometric approach for generating primal capacity output and utilization measures for fisheries in situations where regulatory environmental and resource conditions affect catch levels but are not independently identified in the data frontier based capacity models may interpret such impacts as production inefficiency however if such inefficiencies are unlikely to be eliminated the implied potential output increases may be unrealistic we develop a multi output multi input stochastic transformation function framework that permits various assumptions about how output composition may change when operating at full capacity we apply our model to catcher processor vessels in the alaskan pollock fishery

putting things in order trade dynamics and product cycles we develop a procedure to rank order objects using censored panel data sets we illustrate this by ranking countries and commodities using disaggregated american import data and find evidence that

vulnerability seasonality and poverty in ethiopia most studies examining the dynamics of welfare have found large fluctuations in consumption over relatively short periods suggesting substantial short run movements in and out of poverty the consequence is that cross section poverty research may not be able to identify the poor in this study we explore this short run variability further we use a data set on a panel of 1450 households in different communities in rural ethiopia surveyed thrice over 18 months on average year to year poverty is very similar however we find high variability in consumption and poverty over the seasons and year by year econometric analysis suggests that consumption is affected by idiosyncratic and common shocks including rainfall and household specific crop failure while households respond to seasonal incentives related to changing labour demand and prices the results imply that a larger number of households are vulnerable to shocks than implied by the standard poverty statistics while some of the non poor in the

the export skill content learning by exporting and economic growth abstract we empirically investigate whether countries export mix influences their economic growth using panel data from 86 countries covering the period between 1970 and 1990 we identify a statistically significant positive relationship between export skill content and economic growth the evidence supports the idea that after controlling for the levels of gdp per capita education openness to foreign trade and political and macroeconomic stability a higher export content of skill intensive goods generates higher per capita gdp growth rates

moving up or moving out a unified theory of r d fdi and trade abstract this paper introduces industrial heterogeneity in r d productivity into the quality ladder model of the north south trade to study how firms choices made between r d and foreign direct investment fdi vary across industries and how such choices consequently determine the evolution of comparative advantage and trade it shows that trade reveals product cycle dynamics in medium tech industries but remains static in others high tech industries experience continued innovation in the north with no migration of product lines medium and low tech industries migrate south via fdi to exploit low production costs with the south then replacing the north as the dominant exporter however medium tech industry production eventually shifts back to the north when superior products are marketed by northern innovators making the end of one complete product cycle and the start of the next because of marginal r d productivity the relocated low tech industries are not presented with the option of moving up and thus stagnate