ACTIVITY PORTFOLIOS IN RURAL ETHIOPIA: CHOICES AND CONSTRAINTS

Miet Maertens

No 21839, 2000 Annual meeting, July 30-August 2, Tampa, FL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Peasant households, especially African rural households, can hold very diversified portfolios of economic activities. Portfolio diversification is often seen as a risk-reducing mechanism and linked with lowering risk at the cost of a lower income. A simple theoretical model of activity choice reveals that factors other than risk might influence the desire to diversity. In addition, binding entry-constraints might exist for certain off-farm activities. An empirical analysis of Ethiopian rural households suggests that entry-constraints are important in explaining portfolio and that diversification can actually result in increasing income.

Keywords: Consumer/Household; Economics (search for similar items in EconPapers)
Pages: 27
Date: 2000
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea00:21839

DOI: 10.22004/ag.econ.21839

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