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What’s So Spatial about Diversification in Nigeria?

Paul Corral Rodas () and Natalia Radchenko

World Development, 2017, vol. 95, issue C, 231-253

Abstract: Many households in developing countries allocate their productive assets among various income generating activities in order to develop a portfolio of income from occupations with different degrees of risk, expected returns and seasonal and liquidity constraints. The push and pull factors influencing diversification decisions of households are widely discussed in the literature; however, no study to date has taken into account spatial interdependence of household decisions in spite of various channels of neighborhood effects such as information flow, learning from others, social networks and agglomeration economies. This paper fills in the gap by incorporating spatial dependence in the choice model of diversification using a spatial auto-regressive probit model and an advanced Bayesian strategy to its estimation.

Keywords: income diversification in developing countries; spatial econometrics (search for similar items in EconPapers)
Date: 2017
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