**Table 7a** <u>: Estimation of income diversification (S) and household welfare, rural areas</u>

|**Dependent Variables:**|**1990/91**|||**1995/96**|||
|---|---|---|---|---|---|---|
|Income Diversification (S) and log of per|1<sup>st</sup>stage|IV|OLS|1<sup>st</sup>stage|IV|OLS|
|capita consumption(Cons)|<br>(1) S|(2) Cons|(3) Cons|<br>(4) S|(5) Cons|(6) Cons|
|S||0.98|0.49||1.42|0.55|
|||(13.4)***|(9.8)***||(14.9)***|(8.9)***|
|Head sex (Male)|0.07|-0.02|0.09|0.06|0.01|0.14|
||(12.1)***<br>|(0.9)<br>|(6.0)***<br>|(11.6)***<br>|-0.6<br>|(9.7)***<br>|
|Head age|-0.02<br>|0.08<br>|0.05<br>|-0.02<br>|0.10<br>|0.06<br>|
||(2.2)**|(2.6)***|(1.8)*|(1.9)*|(3.5)***|(2.6)***|
|Age Squared|<br>0.00|<br>-0.01|<br>-0.01|<br>0.00|<br>-0.01|<br>-0.01|
||-0.5|(2.4)**|(2.6)***|(0.3)|(3.1)***|(3.3)***|
|Head education primary|-0.02|<br>0.12|<br>0.09|<br>0.00|<br>0.04|<br>0.03|
||(2.9)***|(5.7)***|(4.8)***|(0.3)|(1.9)*|(2.0)**|
|Head education secondary or higher|<br>0.08|<br>0.31|<br>0.45|<br>0.06|<br>0.11|<br>0.22|
||(8.0)***|(9.2)***|(15.8)***|(6.1)***|(3.7)***|(8.8)***|
|Household size|-0.03|-0.10|-0.14|-0.03|-0.13|-0.18|
||(13.1)***|(14.2)***|(25.3)***|(12.7)***|(18.6)***|(33.9)***|
|# Boys|0.01|0.02|0.03|0.00|0.05|0.06|
||(1.6)|(2.1)**|(3.3)***|(1.1)|(4.9)***|(7.0)***|
|# Girls|<br>0.01|<br>0.01|<br>0.02|<br>0.01|<br>0.06|<br>0.08|
||(2.4)**|(0.7)|(2.2)**|(2.3)**|(5.7)***|(9.0)***|
|# Male adult with primary education|<br>0.02|<br>0.03|<br>0.06|<br>0.01|<br>0.05|<br>0.07|
||(3.6)***|(2.1)**|(4.7)***|(2.8)***|(3.1)***|(5.9)***|
|# Male adult with sec./ higher education|<br>0.01|<br>0.12|<br>0.13|<br>0.00|<br>0.13|<br>0.13|
||(1.7)*|(8.7)***|(11.0)***|(0.6)|(9.2)***|(12.0)***|
|# Female adult with primary education|0.00|0.07|0.07|-0.01|0.07|0.06|
||(0.6)|(4.7)***|(5.9)***|(1.2)|(4.9)***|(5.2)***|
|# Female adult with sec./ higher education|0.02<br>|0.18<br>|0.20<br>|0.01<br>|0.15<br>|0.17<br>|
||(3.3)***|(11.8)***|(15.6)***|(2.2)**|(9.7)***|(13.7)***|
|Per capita asset holding|<br>-0.05<br>***|<br>0.41<br>***|<br>0.33<br>***|<br>-0.06<br>***|<br>0.32<br>***|<br>0.22<br>***|
||(12.9)|(30.5)|(29.9)|(15.8)|(26.8)|(24.0)|
|Access to credit (yes)|<br>0.25|<br>0.10|<br>0.48|<br>0.01|<br>0.35|<br>0.39|
||(20.9)***|(2.2)**|(14.7)***|(0.4)|(7.8)***|(10.8)***|
|Manicaland (yes)|0.03|0.47|0.40|-0.19|0.10|0.11|
||(2.7)***|(21.2)***|(21.6)***|(6.4)***|(4.4)***|(6.0)***|
|Masonaland East (yes)|0.14|-0.03|0.07|-0.04|0.09|0.20|
||(12.6)***|(1.1)|(3.4)***|(2.6)***|(3.9)***|(11.2)***|
|Masonaland West (yes)|0.05|0.21|0.31|0.04|-0.19|-0.07|
||(5.1)***|(8.0)***|(13.8)***|(4.3)***|(7.3)***|(3.5)***|
|Matabeleland North (yes)|<br>0.17|<br>-0.17|<br>0.06|<br>0.17|<br>-0.15|<br>0.02|
||(14.9)***|(5.5)***|(2.5)**|(8.8)***|(5.6)***|(1.2)|
|Midlands (yes)|<br>-0.08|<br>0.24|<br>0.21|<br>0.18|<br>-0.48|<br>-0.21|
||(82)***|(102)***|(106)***|(155)***|(155)***|(93)***|
|Rainfall standard Deviations (planting)|.<br>0.68<br>|.|.|.<br>-0.13<br>|.|.|
||(10.3)***|||(1.4)|||
|Rainfall standard deviations (harvesting)|<br>0.07|||<br>0.22|||
||(4.9)***|||(4.4)***|||
|Constant|<br>0.51|2.46|3.62|<br>0.81|2.13|3.66|
||(15.3)***|(24.7)***|(53.7)***|(17.2)***|(21.3)***|(59.2)***|
|R Squared (adjusted)|0.25|--|0.47|0.18|--|0.44|
|Observations (N)|9342|9342|9342|9910|9910|9910|

Absolute value of t statistics in parentheses. * significant at 10%; **significant at 5%; *** significant at 1% 20