Heterogeneous Returns to Income Diversification : Evidence from Nigeria

Bertoni, Eleonora ; Corral, Paul ; Molini, Vasco ; Oseni, Gbemisola

World Bank, Washington, DC

关键词: income diversification;    off-farm employment;    heterogeneous returns;    household surveys;    non-farm activities;   

DOI  :  10.1596/1813-9450-7894
RP-ID  :  WPS7894

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper investigates the impact ofincome diversification on farming households' welfarein Nigeria on two rounds of the Nigeria General HouseholdSurvey-Panel, namely the 2010/2011 and 2012/2013. The studyfinds that income diversification is the norm in Nigeria,with about 60 percent of farmers diversifying away fromsubsistence farming into non-farm activities and cash crops.In addition, using the panel of farmers interviewed beforeand after a severe drought that hit Northern Nigeria inparticular in 2011, the study finds that diversificationincreased throughout Nigeria from 60 to 64 percent and inthe North from 58 to 63 percent. The study postulates theexistence of heterogeneous returns on diversification as aconsequence of the drought, and estimates the returnsthrough a non-parametric selection model using a localinstrumental variable. The choice of this model is dictatedby the necessity to account for both heterogeneous effectsof diversification and selection bias related tohouseholds' decision to diversify. Overall, it is foundthat diversification positively affects consumption inNigeria. However, who benefits the most is cruciallydetermined by the initial conditions under whichdiversification is undertaken and the specific agro-climaticcontext in which households operate.