Main menu

Is Non-Farm Income Relaxing Farm Investment Liquidity Constraints For Marginal Farms? An Instrumental Variable Approach


The Paper Tested The Hypothesis That Off-Farm Income Relaxes The Liquidity Constraints Of Farm Households, Using Survey Data Derived From 734 Participants' And Non-Participants' Sample Households From Eight Villages, Drawn From The Three Agro-Climatic Zones Of Northern Ethiopia. Iv-Tobit, 2sls And Tobit Models Are Employed. The Results Of The Econometric Models Showed That While Off-Farm Income Positively Affects Modern Agricultural Input Expenditure It Affects Negatively Livestock Investment. This Is Mainly, Due To The Fact That Those Households Who Invest On Improved Agricultural Inputs Do Have Larger Per Capita Land Holding Compared To Those Who Invest On Livestock; It Shows The Complementarities Between Off-Farm And Productivity Enhancing Investment (Agricultural Inputs), But Off-Farm Income Playing A Substitutional Role For Those Landless And Near Landless Households (Those Who Invest In Livestock).

Corporate Author: 
Getnet Alemu & Worku Gebeyehu (Editor) & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Ethiopian Economic Association (EEA)
Geographic Descriptors: 
Cataloge Date: 
Broad Subject heading: 
Off farm-Farm
Call Number: 
330.963 PRO 2012
Serial Key Title: 
Proceedings of the Ninth International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Publication date: 
2013-06-27 23:12:00
Forum or Discussion date: 
2013-02-27 15:57:55
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Current frequency: