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OFF-FARM PARTICIPATION AGRICULTURAL PRODUCTION
AND FARMERS WELFARE IN EAST AFRICA
by
Bethuel Kinyanjui Kinuthia Stephene Maende Laura Baraza Faith
Mariera
University of Nairobi School of Economics
Conference paper
21052018
Abstract
This study examined factors that influence off-farm activities and then the impact of the off-farm participation
on agricultural production and farmersrsquo welfare It covered two important East Africa countries that are Uganda
and Tanzania The economies of these two countries are mainly based on the agricultural sector The large portion
of the households that rely on this sector suffer from low farm production and productivity The study used
households and agriculture datasets from the Living Standards Measurement Study-Integrated Surveys for the two
countries for the period 2008-2012 Further different econometric models related to censoring sample selection
endogeneity and fixed effects are used Results show that there are push and pull factors that influence off-farm
activities in each country such as gender education levels marriage status and cost of inputs and regions The
results show that off-farm activities do not affect agriculture production in both countries even when we control
for gender In addition off-farm activities do not have a positive and significance impact on welfare in both
countries However off-farm activities reduce welfare among the male headed households in Tanzania while in
Uganda it reduces welfare among the female headed households at the 10 percent level
Keywords Off-farm participation Agriculture production Welfare East Africa
2
Table of Contents
10 Introduction 3
20 Background of the study 5
30 Literature Review 8
4 Theoretical Framework and Econometric specification and models 10
41 Theoretical Framework 10
42 Econometric specification and models 11
5 Data and descriptive statistics 14
51 Data 14
52 Descriptive statistics 14
6 Empirical Results and Discussions 16
61 Factors that influence Off-farm participation 16
62 Off-farm participation and agricultural production 16
63 Off-farm participation and welfare 19
64 Estimated results and the common main findings 21
70 Conclusion 21
70 References 49
3
10 Introduction
The agricultural sector is considered East Africarsquos engine for development Sustained
agricultural growth is crucial for reducing hunger and poverty in the region Additionally the
agricultural sector is critical for large populations with about 70 of the poor living in rural
areas In doing this the role of the smallholder farmers cannot be gainsaid Yet long standing
challenges facing smallholder farmers in East Africa include low labour productivity
production and welfare The study examines two East African countriesndash Tanzania and Uganda
where agriculture is the backbone of these economies It accounts for about 75 of the labour
force and is an important sector in job creation and poverty reduction across countries In
addition the agricultural sector is dominated by smallholder farmers and it account for about
75 of agriculture outputs with farm sizes of about 25 Hectares Moreover these farmers use
traditional technologies and consume of their products In these countries food security
remains a challenge despite the different strategies aimed at increasing agricultural production
They also have low productivity and welfare in agriculture (Salami et al 2010)
One key reason for this relates to labour participation on the farms Non-farm activities1
in Africa has been underscored with 48 percent of rural African households participate in non-
farm wage employment or self-employment and that off-farm incomes accounts for 23 percent
of farmersrsquo incomes (Davis et al 2017 Adjognon et al 2017 Haggblade Hazell and
Reardon 2007) Thus the agricultural sector and the rural-non-farm economy typically coexist
Literature shows that farm family members seek off-farm employment for income to meet
family needs to finance farm inputs and technologies or even as risk management strategy
However this direction of causality is not always the case and households can be affected
differently depending on their characteristics Their interaction is likely to result in a
complementarity (Pfeiffer Loacutepez-Feldman and Taylor 2009 Reardon Crawford and Kelly
1994) or competing effect (Barrett Reardon and Webb 2001 Leones and Feldman 1998)
Consequently an interaction resulting in a complementarity implies that policies reinforcing
this relation are beneficial However where the interaction results in a competing effect
policies focusing on minimizing trade-offs between the two are crucial for gains to be realized
Extant literature on rural livelihoods shows that farmers in the rural economy are
involved in off-farm activities in order to increase their income and to reduce rural poverty
1 Non-farm sectoreconomy is considered to include all economic activities in rural areas other than agriculture
livestock finishing and hunting simply the production of primary agricultural commodities (Lanjouw and
Lanjouw 2001 Barrett et al 2001 Haggblade et al 2010 Barrett et al 2011 Adjognon et al 2017) Non-farm
includes mining manufacturing transport commerce agro-processing etc
4
(Barrett et al 2001 de Janvry et al 2005 Loughrey et al2017 Bezu and Holden 2014)
Nevertheless withdrawal of scarce resources such as capital from farm activities to off-farm
activities hampers investment in farm technologies and land conservation resulting in low
production (Barett et al 2001 Haggblade et al 2010 Ivanic and Martin 2017 Zereyesus et
al 2017) Similarly a negative relation between off-farm income and agricultural production
is expected where off-farm income is used for consumption or further investment in non-farm
activities as opposed to invest in on-farm activities (Pfeiffer et al 2009) Furthermore
depending on the degree to which households integrate with factor and product markets the
labour absorbing effect of off-farm activities may adversely affect agricultural output and
incomes (Leones and Feldman 1998 Pham and Ulubasoglu 2014 Reardon 1997)
Reallocation of on-farm family labor to off-farm activities decreases the available pool of
family farm labor and may result in productivity loss and declining or stagnating agricultural
income (Reardon 1997 Adjognon et al 2017 Scharf and Rahut 2014)
However this kind of literature is new in East Africa and little has been done in this
area Furthermore labour participation in agriculture has been reducing and this might
negatively affect agricultural production and farmerrsquos welfare This paper contributes to
empirical research in off-farm participation by first using panel methods in East Africa
following the works of Bezu and Holden (2014) and Adjognon et al (2017) in Ethiopia and
Malawi These works show that non-farm activities affect household welfare and reduce
poverty We use comparative study empirical evidence to understand better effects of off-farm
activities Secondly we explore heterogeneous effects of off-farm participation among gender
Third we focus on the link between off-farm participation agriculture productivity and
welfare
The results of the study are important in helping policy makers to develop policies that
can increase both agriculture production and farmers welfare It is now viewed favorably by
most African countries as witnessed in the Maputo Declaration (AU 2003) that pledged 10
investment and a 6 growth rate Similarly the Malabo Declaration (AU 2014) built on this
to include doubling productivity gains (Dryden 2015) If agriculture will catalyze Africarsquos
development there is need for the smallholder farmers to be the drivers of African agricultural
growth and the goal must be to have sustainable productivity gains in Africa among other
areas Thus understanding how non-farm participation affects agricultural production and
farmersrsquo welfare is imperative for policy formulation in the context of East Africa
The rest of the paper is organized as follows Section 2 focuses on the background of
the study followed by the literature review in section 3 The theoretical framework and
5
Econometric specification and models are in section 4 Section 5 focuses on data and
descriptive statistics Section 6 focuses on the empirical results and discussion Section 7
20 Background of the study
In the East Africa region agriculture plays a pivotal role towards economic growth Over the
years agricultural production has enhanced economic growth poverty reduction food security
and creation of employment In addition majority of the rural poor in East Africa depend on
agriculture as their source of livelihood The agricultural sector employs about 75 of the rural
labour force in the region (Salami etal 2010) The sector is also an important source of
employment for the urban labour force According to World Bank (2011) agriculture
contributed to 28 of the gross domestic product (GDP) for the period 2005-2006 During this
period the share of agriculture to GDP in the region was 39 in Burundi 26 in Kenya 35
in Rwanda 30 in Tanzania and 25 in Uganda
Despite the importance of agriculture in East Africa its contribution to the total GDP
over the past two decades has decline significantly World Bank (2011) notes that during the
period 1990- 1995 the contribution of agriculture to the total GDP was about 40 compared
to the 28 contribution for the period 2005- 2010 However Benin et al (2010) noted that the
decline in agricultural contribution to GDP is not undesirable outcome as it is not a reflection
of the poor performance of agriculture sector Furthermore Karugia et al (2013) argues that
the decline is relative as the absolute contribution of the sector has increased over time The
authors attribute the decline in agriculture to progress in other sectors of the economy that is
the industry and the service sector thus indicating the rise of rural and structural transformation
The growth of industrial and service sector can however enhance the growth of the agricultural
sector through the creation of forward and backward linkages (IFAD 2016 Timmer 1988)
Figure 1 shows the value added per worker for the agricultural sector from 1990 to
2016 The figure indicates that agricultural productivity in East Africa has increased over the
years from USD409 to USD558 and from USD442 to USD473 for the period 1990 to 2016 for
Tanzania and Uganda respectively However there is a substantial fluctuation for Uganda for
the period 1997 to 2016
6
Figure 1 Agriculture value added per worker (constant 2010 US$)
Source World Bank (2016)
The agricultural sector in the East Africa region however faces many challenges of which low
agricultural productivity ranks very high Various factors contribute to low agricultural
productivity in the region including low use of modern technologies harsh weather conditions
pests and diseases poor infrastructure limited access to credit post- harvest losses and market
constraints (Karugia et al 2013) In addition to the low level of agricultural productivity and
high dependence on agriculture rural households also face high poverty levels
Figure 2 present poverty headcount ratio at $190 a day for Uganda and Tanzania The
figure indicates that the percentage of the population living on less than $190 a day has
decreased over time for both countries However the figures are still high with Tanzania at
466 in 2011 and 3464 for Uganda in 2012
0
100
200
300
400
500
600
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
US
$
Tanzania Uganda
7
Figure 2 Poverty headcount ratio at $190 a day (2011 PPP) ( of population)
Source World Bank (2016)
In face of low agricultural productivity and high poverty levels in rural households agriculture
alone cannot cater sufficiently for livelihood opportunities Furthermore migration is not an
option for many the rural households Thus the reallocation of labour from farm to off-farm
employment is essential in reducing rural poverty (Maritime 2001) In Africa the share of
rural non-farm income as a proportion of the total household income ranges between 40 and
50 percent (Rijkers and costa 2012) In East Africa the share stands at Tanzania is 749 and
1269 in Uganda while the contribution of farm income stands at 5721 and 5807
respectively (Nagler and Naude 2017) At least 42 of the rural households in East Africa
engage in non-farm activities (Nagler and Naude 2017) Majority of these households operate
non-farm enterprises requiring less costs and educational experience such as sales and trade In
addition literature shows that women have a higher probability to engage in off-farm activities
than men despite the constraints they encounter in terms of finance and social norms (Minniti
and Naudeacute 2010 Nagler and Naude 2017)
According to Matsumoto et al (2006) expansion of rural non-farm economy in East
Africa can play a significant role in reducing poverty if households have access to employment
opportunities However the authors found that that household with low agricultural
productivity potential are more likely to engage in non-farm activities than those with high
agricultural productivity potential Thus in this incidence it is viewed that rural non- farm
employment is a low productive sector producing low quality goods which is expected to
diminish as nation develops and income increases (Lanjouw and Lanjouw 2001) However
0
10
20
30
40
50
60
70
80
90
100
1989 1991 1992 1996 1999 2000 2002 2005 2007 2009 2011 2012
o
f popula
tion
Tanzania Uganda
8
recent literature argues that non-farm activities has the potential to increase wealth and income
in the rural sector (Barret et al 2001)
The significant contribution of agriculture to the rural economies of Tanzanian and
Uganda with 77 and 80 of the total population respectively is not in question However
due to the growing scarcity of arable land credit constraints and uncertainties associated with
farming non-farm activities have taken root as a way of supplementing reduced income from
farming as well as risk reduction (Katega and Lifuliro 2014) The governments of these
countries recognized the important of non-farm sector by implementing various policies to
improve its performance In Tanzania such policies include The National Micro-Finance
Policy of 2000 and Small and Medium-Term Enterprises (SMEs) Development Policy initiated
in 2003 These policies emphasize on the need to provide soft loans to encourage enterprise
development In addition Tanzaniarsquos National Employment Policy recognizes the role played
by non-farm sector in job creation and sought to coordinate and support the sector to upscale
its operations (Katega and Lifuliro 2014) For the case of Uganda the government has over
the years given priority towards the creation of a conducive macroeconomic climate to
encourage private sector development This is being realized through road construction
ensuring reliable telecommunication services as well as access to energy In addition Ugandarsquos
poverty reduction strategy paper for 2010 laid emphasis on strengthening microfinance
institutions to make it easy and cheap for small enterprises to access credit (IMF 2010)
30 Literature Review
Lewis (1954) and Ranis and Fei (1961) suggest that allocating on-farm labor to non-farm labor
does not adversely affect agricultural productivity because marginal productivity of labor tends
towards zero In addition agricultural labor can be shifted to the industrial sector without total
agricultural output declining which implies that the agricultural shadow wage is nil Others
such as Harris and Todaro (1970) developed a rural-urban migration model where there is no
labor surplus in the agricultural sector As a result the agricultural shadow wage is always
positive However the amount of household labour available and the manner in which that
labour is allocated between critical farm and non-farm tasks as well as agriculture production
Notwithstanding household labour supply choices are not independent of on-farm activities
and vice versa (Singh et al 1986 Ranis and Stewart 1993) and therefore growth of the non-
farm activities are likely feature of structural transformation (David et al 2017) Therefore a
household decision on whether to engage in on-farm or non-farm activities is also dependent
9
on the agricultural shadow wage The implication is that households engage in on-farm activity
whenever the agricultural shadow wage exceeds the wage earned from non-farm activities
(Dimova Michaelowa and Weber 2004 Emran and Shilpi 2017) Yet Picazo-Tadeo and
Reig-Martiacutenez (2005) find a negative association between a high agricultural shadow wage rate
and family labor input which they suggest could be consistent with non-farm labor
opportunities for household members that have attained high levels of education
Various studies examining the relation between off-farm and on-farm employment suggests
that in addition to off-farm and on-farm activities complementing each other they also give
rise to positive spillover effects (see Haggblade et al 2010) For instance Savadogo et al
(1994) observes that incomes from non-farm engagements increase livestock rearing and crop
production in Burkina Faso Similarly Babatunde (2015) finds that in Nigeria non-farm
income improved farm productivity and increased purchase of farm inputs however it also led
to a decline in the use of family labour Earnings from off-farm activities were also found to
positively influence agricultural production and welfare in Ethiopia (Woldenhanna 2001 Bezu
and Holden 2014) Malawi (Adjognon et al 2017) and in Ghana Zereyesus et al (2017)
However off-farm wage employment does reduce welfare among the rich farmers than the
poor ones (Adjognon et al 2017 Scharf and Rahut 2014) In this case it may signal distress
diversification and low productivity opportunities (Haggblade et al 2010) Contrastingly
Wang et al (2015) in a more recent study for Mearttens (2008) for Senegal find that non-farm
activities withdraw labour from agriculture and hence dampening the productivity of the sector
In Ethiopia off-farm activities have reduced in on yields (Kassa et al 2017) Bezu and Holden
(2014) concluded that access to well-paying non-farm activities by household members reduces
incentives for farming which eventually reduces agricultural production and hence food
security Therefore reallocation of labour to non-farm activities will have a negative effect on
agricultural production since movement of labour force from the sector increases its marginal
product as labour becomes scarce Moreover some studies find that factors such as the level
of education are significantly linked to agricultural productivity (Haggblade et al 2010) and
non-farm participation (Matshe ampYoung 2004) Thus educated household members are likely
to opt for non-farm employment which may result in low agricultural productivity
10
4 Theoretical Framework and Econometric specification and models
41 Theoretical Framework
Using the random utility framework a farm household is assumed maximize its utility subject
to time budget production technology constraints Using Owusu et al (2011) and Adjognon
et al (2017) we can have the following model
119880 = 119880(119876 119867) (1)
119879 = 1198711 + 1198712 + 119867 (2)
119875119876 = 11990111199101 minus 11990811198711 + 11990821198712 + 119877 (3)
The farm householdrsquos utility (U) is based on consumption of goods (Q) and leisure (H) in
equation 1 The farm households total time endowment (T) is the sum of the time used in the
farm (L1) and time used in the non-farm activities (L2) as well as time to use in leisure In the
3 equation the budget constraint depends on the price of the consumption good purchased (P)
in the market using the money obtained from the price of farm output (1199011) and the output sold
in the market (1199101) wagesreturns from farm work ( 1199081 ) and off-farm ( 1199082 ) and non-labour
income (R) in equation 3 The agriculture inputs used in the production include improved seeds
fertilizers and crop protection chemicals to machinery irrigation and knowledge These inputs
help in the agriculture production farm productivity and profitability
The first order condition for the utility maximization for the work time location is
120597119880
1205971198711= 1199081
120597119880
120597119876minus
120597119880
120597119871= 0 and
120597119880
1205971198712= 1199082
120597119880
120597119876minus
120597119880
120597119871= 0
(4)
Rearranging equation 4 we get the wagesreturns from both farm and off-farm work
1199081 = (
120597119880
1205971198711120597119880
120597119876
frasl ) and 1199082 = (
120597119880
1205971198712120597119880
120597119876
frasl )
(5)
Using this equation it is possible to derive the labor supply function for the farm households
for both farm and off-farm activities as follows
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
2
Table of Contents
10 Introduction 3
20 Background of the study 5
30 Literature Review 8
4 Theoretical Framework and Econometric specification and models 10
41 Theoretical Framework 10
42 Econometric specification and models 11
5 Data and descriptive statistics 14
51 Data 14
52 Descriptive statistics 14
6 Empirical Results and Discussions 16
61 Factors that influence Off-farm participation 16
62 Off-farm participation and agricultural production 16
63 Off-farm participation and welfare 19
64 Estimated results and the common main findings 21
70 Conclusion 21
70 References 49
3
10 Introduction
The agricultural sector is considered East Africarsquos engine for development Sustained
agricultural growth is crucial for reducing hunger and poverty in the region Additionally the
agricultural sector is critical for large populations with about 70 of the poor living in rural
areas In doing this the role of the smallholder farmers cannot be gainsaid Yet long standing
challenges facing smallholder farmers in East Africa include low labour productivity
production and welfare The study examines two East African countriesndash Tanzania and Uganda
where agriculture is the backbone of these economies It accounts for about 75 of the labour
force and is an important sector in job creation and poverty reduction across countries In
addition the agricultural sector is dominated by smallholder farmers and it account for about
75 of agriculture outputs with farm sizes of about 25 Hectares Moreover these farmers use
traditional technologies and consume of their products In these countries food security
remains a challenge despite the different strategies aimed at increasing agricultural production
They also have low productivity and welfare in agriculture (Salami et al 2010)
One key reason for this relates to labour participation on the farms Non-farm activities1
in Africa has been underscored with 48 percent of rural African households participate in non-
farm wage employment or self-employment and that off-farm incomes accounts for 23 percent
of farmersrsquo incomes (Davis et al 2017 Adjognon et al 2017 Haggblade Hazell and
Reardon 2007) Thus the agricultural sector and the rural-non-farm economy typically coexist
Literature shows that farm family members seek off-farm employment for income to meet
family needs to finance farm inputs and technologies or even as risk management strategy
However this direction of causality is not always the case and households can be affected
differently depending on their characteristics Their interaction is likely to result in a
complementarity (Pfeiffer Loacutepez-Feldman and Taylor 2009 Reardon Crawford and Kelly
1994) or competing effect (Barrett Reardon and Webb 2001 Leones and Feldman 1998)
Consequently an interaction resulting in a complementarity implies that policies reinforcing
this relation are beneficial However where the interaction results in a competing effect
policies focusing on minimizing trade-offs between the two are crucial for gains to be realized
Extant literature on rural livelihoods shows that farmers in the rural economy are
involved in off-farm activities in order to increase their income and to reduce rural poverty
1 Non-farm sectoreconomy is considered to include all economic activities in rural areas other than agriculture
livestock finishing and hunting simply the production of primary agricultural commodities (Lanjouw and
Lanjouw 2001 Barrett et al 2001 Haggblade et al 2010 Barrett et al 2011 Adjognon et al 2017) Non-farm
includes mining manufacturing transport commerce agro-processing etc
4
(Barrett et al 2001 de Janvry et al 2005 Loughrey et al2017 Bezu and Holden 2014)
Nevertheless withdrawal of scarce resources such as capital from farm activities to off-farm
activities hampers investment in farm technologies and land conservation resulting in low
production (Barett et al 2001 Haggblade et al 2010 Ivanic and Martin 2017 Zereyesus et
al 2017) Similarly a negative relation between off-farm income and agricultural production
is expected where off-farm income is used for consumption or further investment in non-farm
activities as opposed to invest in on-farm activities (Pfeiffer et al 2009) Furthermore
depending on the degree to which households integrate with factor and product markets the
labour absorbing effect of off-farm activities may adversely affect agricultural output and
incomes (Leones and Feldman 1998 Pham and Ulubasoglu 2014 Reardon 1997)
Reallocation of on-farm family labor to off-farm activities decreases the available pool of
family farm labor and may result in productivity loss and declining or stagnating agricultural
income (Reardon 1997 Adjognon et al 2017 Scharf and Rahut 2014)
However this kind of literature is new in East Africa and little has been done in this
area Furthermore labour participation in agriculture has been reducing and this might
negatively affect agricultural production and farmerrsquos welfare This paper contributes to
empirical research in off-farm participation by first using panel methods in East Africa
following the works of Bezu and Holden (2014) and Adjognon et al (2017) in Ethiopia and
Malawi These works show that non-farm activities affect household welfare and reduce
poverty We use comparative study empirical evidence to understand better effects of off-farm
activities Secondly we explore heterogeneous effects of off-farm participation among gender
Third we focus on the link between off-farm participation agriculture productivity and
welfare
The results of the study are important in helping policy makers to develop policies that
can increase both agriculture production and farmers welfare It is now viewed favorably by
most African countries as witnessed in the Maputo Declaration (AU 2003) that pledged 10
investment and a 6 growth rate Similarly the Malabo Declaration (AU 2014) built on this
to include doubling productivity gains (Dryden 2015) If agriculture will catalyze Africarsquos
development there is need for the smallholder farmers to be the drivers of African agricultural
growth and the goal must be to have sustainable productivity gains in Africa among other
areas Thus understanding how non-farm participation affects agricultural production and
farmersrsquo welfare is imperative for policy formulation in the context of East Africa
The rest of the paper is organized as follows Section 2 focuses on the background of
the study followed by the literature review in section 3 The theoretical framework and
5
Econometric specification and models are in section 4 Section 5 focuses on data and
descriptive statistics Section 6 focuses on the empirical results and discussion Section 7
20 Background of the study
In the East Africa region agriculture plays a pivotal role towards economic growth Over the
years agricultural production has enhanced economic growth poverty reduction food security
and creation of employment In addition majority of the rural poor in East Africa depend on
agriculture as their source of livelihood The agricultural sector employs about 75 of the rural
labour force in the region (Salami etal 2010) The sector is also an important source of
employment for the urban labour force According to World Bank (2011) agriculture
contributed to 28 of the gross domestic product (GDP) for the period 2005-2006 During this
period the share of agriculture to GDP in the region was 39 in Burundi 26 in Kenya 35
in Rwanda 30 in Tanzania and 25 in Uganda
Despite the importance of agriculture in East Africa its contribution to the total GDP
over the past two decades has decline significantly World Bank (2011) notes that during the
period 1990- 1995 the contribution of agriculture to the total GDP was about 40 compared
to the 28 contribution for the period 2005- 2010 However Benin et al (2010) noted that the
decline in agricultural contribution to GDP is not undesirable outcome as it is not a reflection
of the poor performance of agriculture sector Furthermore Karugia et al (2013) argues that
the decline is relative as the absolute contribution of the sector has increased over time The
authors attribute the decline in agriculture to progress in other sectors of the economy that is
the industry and the service sector thus indicating the rise of rural and structural transformation
The growth of industrial and service sector can however enhance the growth of the agricultural
sector through the creation of forward and backward linkages (IFAD 2016 Timmer 1988)
Figure 1 shows the value added per worker for the agricultural sector from 1990 to
2016 The figure indicates that agricultural productivity in East Africa has increased over the
years from USD409 to USD558 and from USD442 to USD473 for the period 1990 to 2016 for
Tanzania and Uganda respectively However there is a substantial fluctuation for Uganda for
the period 1997 to 2016
6
Figure 1 Agriculture value added per worker (constant 2010 US$)
Source World Bank (2016)
The agricultural sector in the East Africa region however faces many challenges of which low
agricultural productivity ranks very high Various factors contribute to low agricultural
productivity in the region including low use of modern technologies harsh weather conditions
pests and diseases poor infrastructure limited access to credit post- harvest losses and market
constraints (Karugia et al 2013) In addition to the low level of agricultural productivity and
high dependence on agriculture rural households also face high poverty levels
Figure 2 present poverty headcount ratio at $190 a day for Uganda and Tanzania The
figure indicates that the percentage of the population living on less than $190 a day has
decreased over time for both countries However the figures are still high with Tanzania at
466 in 2011 and 3464 for Uganda in 2012
0
100
200
300
400
500
600
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
US
$
Tanzania Uganda
7
Figure 2 Poverty headcount ratio at $190 a day (2011 PPP) ( of population)
Source World Bank (2016)
In face of low agricultural productivity and high poverty levels in rural households agriculture
alone cannot cater sufficiently for livelihood opportunities Furthermore migration is not an
option for many the rural households Thus the reallocation of labour from farm to off-farm
employment is essential in reducing rural poverty (Maritime 2001) In Africa the share of
rural non-farm income as a proportion of the total household income ranges between 40 and
50 percent (Rijkers and costa 2012) In East Africa the share stands at Tanzania is 749 and
1269 in Uganda while the contribution of farm income stands at 5721 and 5807
respectively (Nagler and Naude 2017) At least 42 of the rural households in East Africa
engage in non-farm activities (Nagler and Naude 2017) Majority of these households operate
non-farm enterprises requiring less costs and educational experience such as sales and trade In
addition literature shows that women have a higher probability to engage in off-farm activities
than men despite the constraints they encounter in terms of finance and social norms (Minniti
and Naudeacute 2010 Nagler and Naude 2017)
According to Matsumoto et al (2006) expansion of rural non-farm economy in East
Africa can play a significant role in reducing poverty if households have access to employment
opportunities However the authors found that that household with low agricultural
productivity potential are more likely to engage in non-farm activities than those with high
agricultural productivity potential Thus in this incidence it is viewed that rural non- farm
employment is a low productive sector producing low quality goods which is expected to
diminish as nation develops and income increases (Lanjouw and Lanjouw 2001) However
0
10
20
30
40
50
60
70
80
90
100
1989 1991 1992 1996 1999 2000 2002 2005 2007 2009 2011 2012
o
f popula
tion
Tanzania Uganda
8
recent literature argues that non-farm activities has the potential to increase wealth and income
in the rural sector (Barret et al 2001)
The significant contribution of agriculture to the rural economies of Tanzanian and
Uganda with 77 and 80 of the total population respectively is not in question However
due to the growing scarcity of arable land credit constraints and uncertainties associated with
farming non-farm activities have taken root as a way of supplementing reduced income from
farming as well as risk reduction (Katega and Lifuliro 2014) The governments of these
countries recognized the important of non-farm sector by implementing various policies to
improve its performance In Tanzania such policies include The National Micro-Finance
Policy of 2000 and Small and Medium-Term Enterprises (SMEs) Development Policy initiated
in 2003 These policies emphasize on the need to provide soft loans to encourage enterprise
development In addition Tanzaniarsquos National Employment Policy recognizes the role played
by non-farm sector in job creation and sought to coordinate and support the sector to upscale
its operations (Katega and Lifuliro 2014) For the case of Uganda the government has over
the years given priority towards the creation of a conducive macroeconomic climate to
encourage private sector development This is being realized through road construction
ensuring reliable telecommunication services as well as access to energy In addition Ugandarsquos
poverty reduction strategy paper for 2010 laid emphasis on strengthening microfinance
institutions to make it easy and cheap for small enterprises to access credit (IMF 2010)
30 Literature Review
Lewis (1954) and Ranis and Fei (1961) suggest that allocating on-farm labor to non-farm labor
does not adversely affect agricultural productivity because marginal productivity of labor tends
towards zero In addition agricultural labor can be shifted to the industrial sector without total
agricultural output declining which implies that the agricultural shadow wage is nil Others
such as Harris and Todaro (1970) developed a rural-urban migration model where there is no
labor surplus in the agricultural sector As a result the agricultural shadow wage is always
positive However the amount of household labour available and the manner in which that
labour is allocated between critical farm and non-farm tasks as well as agriculture production
Notwithstanding household labour supply choices are not independent of on-farm activities
and vice versa (Singh et al 1986 Ranis and Stewart 1993) and therefore growth of the non-
farm activities are likely feature of structural transformation (David et al 2017) Therefore a
household decision on whether to engage in on-farm or non-farm activities is also dependent
9
on the agricultural shadow wage The implication is that households engage in on-farm activity
whenever the agricultural shadow wage exceeds the wage earned from non-farm activities
(Dimova Michaelowa and Weber 2004 Emran and Shilpi 2017) Yet Picazo-Tadeo and
Reig-Martiacutenez (2005) find a negative association between a high agricultural shadow wage rate
and family labor input which they suggest could be consistent with non-farm labor
opportunities for household members that have attained high levels of education
Various studies examining the relation between off-farm and on-farm employment suggests
that in addition to off-farm and on-farm activities complementing each other they also give
rise to positive spillover effects (see Haggblade et al 2010) For instance Savadogo et al
(1994) observes that incomes from non-farm engagements increase livestock rearing and crop
production in Burkina Faso Similarly Babatunde (2015) finds that in Nigeria non-farm
income improved farm productivity and increased purchase of farm inputs however it also led
to a decline in the use of family labour Earnings from off-farm activities were also found to
positively influence agricultural production and welfare in Ethiopia (Woldenhanna 2001 Bezu
and Holden 2014) Malawi (Adjognon et al 2017) and in Ghana Zereyesus et al (2017)
However off-farm wage employment does reduce welfare among the rich farmers than the
poor ones (Adjognon et al 2017 Scharf and Rahut 2014) In this case it may signal distress
diversification and low productivity opportunities (Haggblade et al 2010) Contrastingly
Wang et al (2015) in a more recent study for Mearttens (2008) for Senegal find that non-farm
activities withdraw labour from agriculture and hence dampening the productivity of the sector
In Ethiopia off-farm activities have reduced in on yields (Kassa et al 2017) Bezu and Holden
(2014) concluded that access to well-paying non-farm activities by household members reduces
incentives for farming which eventually reduces agricultural production and hence food
security Therefore reallocation of labour to non-farm activities will have a negative effect on
agricultural production since movement of labour force from the sector increases its marginal
product as labour becomes scarce Moreover some studies find that factors such as the level
of education are significantly linked to agricultural productivity (Haggblade et al 2010) and
non-farm participation (Matshe ampYoung 2004) Thus educated household members are likely
to opt for non-farm employment which may result in low agricultural productivity
10
4 Theoretical Framework and Econometric specification and models
41 Theoretical Framework
Using the random utility framework a farm household is assumed maximize its utility subject
to time budget production technology constraints Using Owusu et al (2011) and Adjognon
et al (2017) we can have the following model
119880 = 119880(119876 119867) (1)
119879 = 1198711 + 1198712 + 119867 (2)
119875119876 = 11990111199101 minus 11990811198711 + 11990821198712 + 119877 (3)
The farm householdrsquos utility (U) is based on consumption of goods (Q) and leisure (H) in
equation 1 The farm households total time endowment (T) is the sum of the time used in the
farm (L1) and time used in the non-farm activities (L2) as well as time to use in leisure In the
3 equation the budget constraint depends on the price of the consumption good purchased (P)
in the market using the money obtained from the price of farm output (1199011) and the output sold
in the market (1199101) wagesreturns from farm work ( 1199081 ) and off-farm ( 1199082 ) and non-labour
income (R) in equation 3 The agriculture inputs used in the production include improved seeds
fertilizers and crop protection chemicals to machinery irrigation and knowledge These inputs
help in the agriculture production farm productivity and profitability
The first order condition for the utility maximization for the work time location is
120597119880
1205971198711= 1199081
120597119880
120597119876minus
120597119880
120597119871= 0 and
120597119880
1205971198712= 1199082
120597119880
120597119876minus
120597119880
120597119871= 0
(4)
Rearranging equation 4 we get the wagesreturns from both farm and off-farm work
1199081 = (
120597119880
1205971198711120597119880
120597119876
frasl ) and 1199082 = (
120597119880
1205971198712120597119880
120597119876
frasl )
(5)
Using this equation it is possible to derive the labor supply function for the farm households
for both farm and off-farm activities as follows
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
3
10 Introduction
The agricultural sector is considered East Africarsquos engine for development Sustained
agricultural growth is crucial for reducing hunger and poverty in the region Additionally the
agricultural sector is critical for large populations with about 70 of the poor living in rural
areas In doing this the role of the smallholder farmers cannot be gainsaid Yet long standing
challenges facing smallholder farmers in East Africa include low labour productivity
production and welfare The study examines two East African countriesndash Tanzania and Uganda
where agriculture is the backbone of these economies It accounts for about 75 of the labour
force and is an important sector in job creation and poverty reduction across countries In
addition the agricultural sector is dominated by smallholder farmers and it account for about
75 of agriculture outputs with farm sizes of about 25 Hectares Moreover these farmers use
traditional technologies and consume of their products In these countries food security
remains a challenge despite the different strategies aimed at increasing agricultural production
They also have low productivity and welfare in agriculture (Salami et al 2010)
One key reason for this relates to labour participation on the farms Non-farm activities1
in Africa has been underscored with 48 percent of rural African households participate in non-
farm wage employment or self-employment and that off-farm incomes accounts for 23 percent
of farmersrsquo incomes (Davis et al 2017 Adjognon et al 2017 Haggblade Hazell and
Reardon 2007) Thus the agricultural sector and the rural-non-farm economy typically coexist
Literature shows that farm family members seek off-farm employment for income to meet
family needs to finance farm inputs and technologies or even as risk management strategy
However this direction of causality is not always the case and households can be affected
differently depending on their characteristics Their interaction is likely to result in a
complementarity (Pfeiffer Loacutepez-Feldman and Taylor 2009 Reardon Crawford and Kelly
1994) or competing effect (Barrett Reardon and Webb 2001 Leones and Feldman 1998)
Consequently an interaction resulting in a complementarity implies that policies reinforcing
this relation are beneficial However where the interaction results in a competing effect
policies focusing on minimizing trade-offs between the two are crucial for gains to be realized
Extant literature on rural livelihoods shows that farmers in the rural economy are
involved in off-farm activities in order to increase their income and to reduce rural poverty
1 Non-farm sectoreconomy is considered to include all economic activities in rural areas other than agriculture
livestock finishing and hunting simply the production of primary agricultural commodities (Lanjouw and
Lanjouw 2001 Barrett et al 2001 Haggblade et al 2010 Barrett et al 2011 Adjognon et al 2017) Non-farm
includes mining manufacturing transport commerce agro-processing etc
4
(Barrett et al 2001 de Janvry et al 2005 Loughrey et al2017 Bezu and Holden 2014)
Nevertheless withdrawal of scarce resources such as capital from farm activities to off-farm
activities hampers investment in farm technologies and land conservation resulting in low
production (Barett et al 2001 Haggblade et al 2010 Ivanic and Martin 2017 Zereyesus et
al 2017) Similarly a negative relation between off-farm income and agricultural production
is expected where off-farm income is used for consumption or further investment in non-farm
activities as opposed to invest in on-farm activities (Pfeiffer et al 2009) Furthermore
depending on the degree to which households integrate with factor and product markets the
labour absorbing effect of off-farm activities may adversely affect agricultural output and
incomes (Leones and Feldman 1998 Pham and Ulubasoglu 2014 Reardon 1997)
Reallocation of on-farm family labor to off-farm activities decreases the available pool of
family farm labor and may result in productivity loss and declining or stagnating agricultural
income (Reardon 1997 Adjognon et al 2017 Scharf and Rahut 2014)
However this kind of literature is new in East Africa and little has been done in this
area Furthermore labour participation in agriculture has been reducing and this might
negatively affect agricultural production and farmerrsquos welfare This paper contributes to
empirical research in off-farm participation by first using panel methods in East Africa
following the works of Bezu and Holden (2014) and Adjognon et al (2017) in Ethiopia and
Malawi These works show that non-farm activities affect household welfare and reduce
poverty We use comparative study empirical evidence to understand better effects of off-farm
activities Secondly we explore heterogeneous effects of off-farm participation among gender
Third we focus on the link between off-farm participation agriculture productivity and
welfare
The results of the study are important in helping policy makers to develop policies that
can increase both agriculture production and farmers welfare It is now viewed favorably by
most African countries as witnessed in the Maputo Declaration (AU 2003) that pledged 10
investment and a 6 growth rate Similarly the Malabo Declaration (AU 2014) built on this
to include doubling productivity gains (Dryden 2015) If agriculture will catalyze Africarsquos
development there is need for the smallholder farmers to be the drivers of African agricultural
growth and the goal must be to have sustainable productivity gains in Africa among other
areas Thus understanding how non-farm participation affects agricultural production and
farmersrsquo welfare is imperative for policy formulation in the context of East Africa
The rest of the paper is organized as follows Section 2 focuses on the background of
the study followed by the literature review in section 3 The theoretical framework and
5
Econometric specification and models are in section 4 Section 5 focuses on data and
descriptive statistics Section 6 focuses on the empirical results and discussion Section 7
20 Background of the study
In the East Africa region agriculture plays a pivotal role towards economic growth Over the
years agricultural production has enhanced economic growth poverty reduction food security
and creation of employment In addition majority of the rural poor in East Africa depend on
agriculture as their source of livelihood The agricultural sector employs about 75 of the rural
labour force in the region (Salami etal 2010) The sector is also an important source of
employment for the urban labour force According to World Bank (2011) agriculture
contributed to 28 of the gross domestic product (GDP) for the period 2005-2006 During this
period the share of agriculture to GDP in the region was 39 in Burundi 26 in Kenya 35
in Rwanda 30 in Tanzania and 25 in Uganda
Despite the importance of agriculture in East Africa its contribution to the total GDP
over the past two decades has decline significantly World Bank (2011) notes that during the
period 1990- 1995 the contribution of agriculture to the total GDP was about 40 compared
to the 28 contribution for the period 2005- 2010 However Benin et al (2010) noted that the
decline in agricultural contribution to GDP is not undesirable outcome as it is not a reflection
of the poor performance of agriculture sector Furthermore Karugia et al (2013) argues that
the decline is relative as the absolute contribution of the sector has increased over time The
authors attribute the decline in agriculture to progress in other sectors of the economy that is
the industry and the service sector thus indicating the rise of rural and structural transformation
The growth of industrial and service sector can however enhance the growth of the agricultural
sector through the creation of forward and backward linkages (IFAD 2016 Timmer 1988)
Figure 1 shows the value added per worker for the agricultural sector from 1990 to
2016 The figure indicates that agricultural productivity in East Africa has increased over the
years from USD409 to USD558 and from USD442 to USD473 for the period 1990 to 2016 for
Tanzania and Uganda respectively However there is a substantial fluctuation for Uganda for
the period 1997 to 2016
6
Figure 1 Agriculture value added per worker (constant 2010 US$)
Source World Bank (2016)
The agricultural sector in the East Africa region however faces many challenges of which low
agricultural productivity ranks very high Various factors contribute to low agricultural
productivity in the region including low use of modern technologies harsh weather conditions
pests and diseases poor infrastructure limited access to credit post- harvest losses and market
constraints (Karugia et al 2013) In addition to the low level of agricultural productivity and
high dependence on agriculture rural households also face high poverty levels
Figure 2 present poverty headcount ratio at $190 a day for Uganda and Tanzania The
figure indicates that the percentage of the population living on less than $190 a day has
decreased over time for both countries However the figures are still high with Tanzania at
466 in 2011 and 3464 for Uganda in 2012
0
100
200
300
400
500
600
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
US
$
Tanzania Uganda
7
Figure 2 Poverty headcount ratio at $190 a day (2011 PPP) ( of population)
Source World Bank (2016)
In face of low agricultural productivity and high poverty levels in rural households agriculture
alone cannot cater sufficiently for livelihood opportunities Furthermore migration is not an
option for many the rural households Thus the reallocation of labour from farm to off-farm
employment is essential in reducing rural poverty (Maritime 2001) In Africa the share of
rural non-farm income as a proportion of the total household income ranges between 40 and
50 percent (Rijkers and costa 2012) In East Africa the share stands at Tanzania is 749 and
1269 in Uganda while the contribution of farm income stands at 5721 and 5807
respectively (Nagler and Naude 2017) At least 42 of the rural households in East Africa
engage in non-farm activities (Nagler and Naude 2017) Majority of these households operate
non-farm enterprises requiring less costs and educational experience such as sales and trade In
addition literature shows that women have a higher probability to engage in off-farm activities
than men despite the constraints they encounter in terms of finance and social norms (Minniti
and Naudeacute 2010 Nagler and Naude 2017)
According to Matsumoto et al (2006) expansion of rural non-farm economy in East
Africa can play a significant role in reducing poverty if households have access to employment
opportunities However the authors found that that household with low agricultural
productivity potential are more likely to engage in non-farm activities than those with high
agricultural productivity potential Thus in this incidence it is viewed that rural non- farm
employment is a low productive sector producing low quality goods which is expected to
diminish as nation develops and income increases (Lanjouw and Lanjouw 2001) However
0
10
20
30
40
50
60
70
80
90
100
1989 1991 1992 1996 1999 2000 2002 2005 2007 2009 2011 2012
o
f popula
tion
Tanzania Uganda
8
recent literature argues that non-farm activities has the potential to increase wealth and income
in the rural sector (Barret et al 2001)
The significant contribution of agriculture to the rural economies of Tanzanian and
Uganda with 77 and 80 of the total population respectively is not in question However
due to the growing scarcity of arable land credit constraints and uncertainties associated with
farming non-farm activities have taken root as a way of supplementing reduced income from
farming as well as risk reduction (Katega and Lifuliro 2014) The governments of these
countries recognized the important of non-farm sector by implementing various policies to
improve its performance In Tanzania such policies include The National Micro-Finance
Policy of 2000 and Small and Medium-Term Enterprises (SMEs) Development Policy initiated
in 2003 These policies emphasize on the need to provide soft loans to encourage enterprise
development In addition Tanzaniarsquos National Employment Policy recognizes the role played
by non-farm sector in job creation and sought to coordinate and support the sector to upscale
its operations (Katega and Lifuliro 2014) For the case of Uganda the government has over
the years given priority towards the creation of a conducive macroeconomic climate to
encourage private sector development This is being realized through road construction
ensuring reliable telecommunication services as well as access to energy In addition Ugandarsquos
poverty reduction strategy paper for 2010 laid emphasis on strengthening microfinance
institutions to make it easy and cheap for small enterprises to access credit (IMF 2010)
30 Literature Review
Lewis (1954) and Ranis and Fei (1961) suggest that allocating on-farm labor to non-farm labor
does not adversely affect agricultural productivity because marginal productivity of labor tends
towards zero In addition agricultural labor can be shifted to the industrial sector without total
agricultural output declining which implies that the agricultural shadow wage is nil Others
such as Harris and Todaro (1970) developed a rural-urban migration model where there is no
labor surplus in the agricultural sector As a result the agricultural shadow wage is always
positive However the amount of household labour available and the manner in which that
labour is allocated between critical farm and non-farm tasks as well as agriculture production
Notwithstanding household labour supply choices are not independent of on-farm activities
and vice versa (Singh et al 1986 Ranis and Stewart 1993) and therefore growth of the non-
farm activities are likely feature of structural transformation (David et al 2017) Therefore a
household decision on whether to engage in on-farm or non-farm activities is also dependent
9
on the agricultural shadow wage The implication is that households engage in on-farm activity
whenever the agricultural shadow wage exceeds the wage earned from non-farm activities
(Dimova Michaelowa and Weber 2004 Emran and Shilpi 2017) Yet Picazo-Tadeo and
Reig-Martiacutenez (2005) find a negative association between a high agricultural shadow wage rate
and family labor input which they suggest could be consistent with non-farm labor
opportunities for household members that have attained high levels of education
Various studies examining the relation between off-farm and on-farm employment suggests
that in addition to off-farm and on-farm activities complementing each other they also give
rise to positive spillover effects (see Haggblade et al 2010) For instance Savadogo et al
(1994) observes that incomes from non-farm engagements increase livestock rearing and crop
production in Burkina Faso Similarly Babatunde (2015) finds that in Nigeria non-farm
income improved farm productivity and increased purchase of farm inputs however it also led
to a decline in the use of family labour Earnings from off-farm activities were also found to
positively influence agricultural production and welfare in Ethiopia (Woldenhanna 2001 Bezu
and Holden 2014) Malawi (Adjognon et al 2017) and in Ghana Zereyesus et al (2017)
However off-farm wage employment does reduce welfare among the rich farmers than the
poor ones (Adjognon et al 2017 Scharf and Rahut 2014) In this case it may signal distress
diversification and low productivity opportunities (Haggblade et al 2010) Contrastingly
Wang et al (2015) in a more recent study for Mearttens (2008) for Senegal find that non-farm
activities withdraw labour from agriculture and hence dampening the productivity of the sector
In Ethiopia off-farm activities have reduced in on yields (Kassa et al 2017) Bezu and Holden
(2014) concluded that access to well-paying non-farm activities by household members reduces
incentives for farming which eventually reduces agricultural production and hence food
security Therefore reallocation of labour to non-farm activities will have a negative effect on
agricultural production since movement of labour force from the sector increases its marginal
product as labour becomes scarce Moreover some studies find that factors such as the level
of education are significantly linked to agricultural productivity (Haggblade et al 2010) and
non-farm participation (Matshe ampYoung 2004) Thus educated household members are likely
to opt for non-farm employment which may result in low agricultural productivity
10
4 Theoretical Framework and Econometric specification and models
41 Theoretical Framework
Using the random utility framework a farm household is assumed maximize its utility subject
to time budget production technology constraints Using Owusu et al (2011) and Adjognon
et al (2017) we can have the following model
119880 = 119880(119876 119867) (1)
119879 = 1198711 + 1198712 + 119867 (2)
119875119876 = 11990111199101 minus 11990811198711 + 11990821198712 + 119877 (3)
The farm householdrsquos utility (U) is based on consumption of goods (Q) and leisure (H) in
equation 1 The farm households total time endowment (T) is the sum of the time used in the
farm (L1) and time used in the non-farm activities (L2) as well as time to use in leisure In the
3 equation the budget constraint depends on the price of the consumption good purchased (P)
in the market using the money obtained from the price of farm output (1199011) and the output sold
in the market (1199101) wagesreturns from farm work ( 1199081 ) and off-farm ( 1199082 ) and non-labour
income (R) in equation 3 The agriculture inputs used in the production include improved seeds
fertilizers and crop protection chemicals to machinery irrigation and knowledge These inputs
help in the agriculture production farm productivity and profitability
The first order condition for the utility maximization for the work time location is
120597119880
1205971198711= 1199081
120597119880
120597119876minus
120597119880
120597119871= 0 and
120597119880
1205971198712= 1199082
120597119880
120597119876minus
120597119880
120597119871= 0
(4)
Rearranging equation 4 we get the wagesreturns from both farm and off-farm work
1199081 = (
120597119880
1205971198711120597119880
120597119876
frasl ) and 1199082 = (
120597119880
1205971198712120597119880
120597119876
frasl )
(5)
Using this equation it is possible to derive the labor supply function for the farm households
for both farm and off-farm activities as follows
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
4
(Barrett et al 2001 de Janvry et al 2005 Loughrey et al2017 Bezu and Holden 2014)
Nevertheless withdrawal of scarce resources such as capital from farm activities to off-farm
activities hampers investment in farm technologies and land conservation resulting in low
production (Barett et al 2001 Haggblade et al 2010 Ivanic and Martin 2017 Zereyesus et
al 2017) Similarly a negative relation between off-farm income and agricultural production
is expected where off-farm income is used for consumption or further investment in non-farm
activities as opposed to invest in on-farm activities (Pfeiffer et al 2009) Furthermore
depending on the degree to which households integrate with factor and product markets the
labour absorbing effect of off-farm activities may adversely affect agricultural output and
incomes (Leones and Feldman 1998 Pham and Ulubasoglu 2014 Reardon 1997)
Reallocation of on-farm family labor to off-farm activities decreases the available pool of
family farm labor and may result in productivity loss and declining or stagnating agricultural
income (Reardon 1997 Adjognon et al 2017 Scharf and Rahut 2014)
However this kind of literature is new in East Africa and little has been done in this
area Furthermore labour participation in agriculture has been reducing and this might
negatively affect agricultural production and farmerrsquos welfare This paper contributes to
empirical research in off-farm participation by first using panel methods in East Africa
following the works of Bezu and Holden (2014) and Adjognon et al (2017) in Ethiopia and
Malawi These works show that non-farm activities affect household welfare and reduce
poverty We use comparative study empirical evidence to understand better effects of off-farm
activities Secondly we explore heterogeneous effects of off-farm participation among gender
Third we focus on the link between off-farm participation agriculture productivity and
welfare
The results of the study are important in helping policy makers to develop policies that
can increase both agriculture production and farmers welfare It is now viewed favorably by
most African countries as witnessed in the Maputo Declaration (AU 2003) that pledged 10
investment and a 6 growth rate Similarly the Malabo Declaration (AU 2014) built on this
to include doubling productivity gains (Dryden 2015) If agriculture will catalyze Africarsquos
development there is need for the smallholder farmers to be the drivers of African agricultural
growth and the goal must be to have sustainable productivity gains in Africa among other
areas Thus understanding how non-farm participation affects agricultural production and
farmersrsquo welfare is imperative for policy formulation in the context of East Africa
The rest of the paper is organized as follows Section 2 focuses on the background of
the study followed by the literature review in section 3 The theoretical framework and
5
Econometric specification and models are in section 4 Section 5 focuses on data and
descriptive statistics Section 6 focuses on the empirical results and discussion Section 7
20 Background of the study
In the East Africa region agriculture plays a pivotal role towards economic growth Over the
years agricultural production has enhanced economic growth poverty reduction food security
and creation of employment In addition majority of the rural poor in East Africa depend on
agriculture as their source of livelihood The agricultural sector employs about 75 of the rural
labour force in the region (Salami etal 2010) The sector is also an important source of
employment for the urban labour force According to World Bank (2011) agriculture
contributed to 28 of the gross domestic product (GDP) for the period 2005-2006 During this
period the share of agriculture to GDP in the region was 39 in Burundi 26 in Kenya 35
in Rwanda 30 in Tanzania and 25 in Uganda
Despite the importance of agriculture in East Africa its contribution to the total GDP
over the past two decades has decline significantly World Bank (2011) notes that during the
period 1990- 1995 the contribution of agriculture to the total GDP was about 40 compared
to the 28 contribution for the period 2005- 2010 However Benin et al (2010) noted that the
decline in agricultural contribution to GDP is not undesirable outcome as it is not a reflection
of the poor performance of agriculture sector Furthermore Karugia et al (2013) argues that
the decline is relative as the absolute contribution of the sector has increased over time The
authors attribute the decline in agriculture to progress in other sectors of the economy that is
the industry and the service sector thus indicating the rise of rural and structural transformation
The growth of industrial and service sector can however enhance the growth of the agricultural
sector through the creation of forward and backward linkages (IFAD 2016 Timmer 1988)
Figure 1 shows the value added per worker for the agricultural sector from 1990 to
2016 The figure indicates that agricultural productivity in East Africa has increased over the
years from USD409 to USD558 and from USD442 to USD473 for the period 1990 to 2016 for
Tanzania and Uganda respectively However there is a substantial fluctuation for Uganda for
the period 1997 to 2016
6
Figure 1 Agriculture value added per worker (constant 2010 US$)
Source World Bank (2016)
The agricultural sector in the East Africa region however faces many challenges of which low
agricultural productivity ranks very high Various factors contribute to low agricultural
productivity in the region including low use of modern technologies harsh weather conditions
pests and diseases poor infrastructure limited access to credit post- harvest losses and market
constraints (Karugia et al 2013) In addition to the low level of agricultural productivity and
high dependence on agriculture rural households also face high poverty levels
Figure 2 present poverty headcount ratio at $190 a day for Uganda and Tanzania The
figure indicates that the percentage of the population living on less than $190 a day has
decreased over time for both countries However the figures are still high with Tanzania at
466 in 2011 and 3464 for Uganda in 2012
0
100
200
300
400
500
600
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
US
$
Tanzania Uganda
7
Figure 2 Poverty headcount ratio at $190 a day (2011 PPP) ( of population)
Source World Bank (2016)
In face of low agricultural productivity and high poverty levels in rural households agriculture
alone cannot cater sufficiently for livelihood opportunities Furthermore migration is not an
option for many the rural households Thus the reallocation of labour from farm to off-farm
employment is essential in reducing rural poverty (Maritime 2001) In Africa the share of
rural non-farm income as a proportion of the total household income ranges between 40 and
50 percent (Rijkers and costa 2012) In East Africa the share stands at Tanzania is 749 and
1269 in Uganda while the contribution of farm income stands at 5721 and 5807
respectively (Nagler and Naude 2017) At least 42 of the rural households in East Africa
engage in non-farm activities (Nagler and Naude 2017) Majority of these households operate
non-farm enterprises requiring less costs and educational experience such as sales and trade In
addition literature shows that women have a higher probability to engage in off-farm activities
than men despite the constraints they encounter in terms of finance and social norms (Minniti
and Naudeacute 2010 Nagler and Naude 2017)
According to Matsumoto et al (2006) expansion of rural non-farm economy in East
Africa can play a significant role in reducing poverty if households have access to employment
opportunities However the authors found that that household with low agricultural
productivity potential are more likely to engage in non-farm activities than those with high
agricultural productivity potential Thus in this incidence it is viewed that rural non- farm
employment is a low productive sector producing low quality goods which is expected to
diminish as nation develops and income increases (Lanjouw and Lanjouw 2001) However
0
10
20
30
40
50
60
70
80
90
100
1989 1991 1992 1996 1999 2000 2002 2005 2007 2009 2011 2012
o
f popula
tion
Tanzania Uganda
8
recent literature argues that non-farm activities has the potential to increase wealth and income
in the rural sector (Barret et al 2001)
The significant contribution of agriculture to the rural economies of Tanzanian and
Uganda with 77 and 80 of the total population respectively is not in question However
due to the growing scarcity of arable land credit constraints and uncertainties associated with
farming non-farm activities have taken root as a way of supplementing reduced income from
farming as well as risk reduction (Katega and Lifuliro 2014) The governments of these
countries recognized the important of non-farm sector by implementing various policies to
improve its performance In Tanzania such policies include The National Micro-Finance
Policy of 2000 and Small and Medium-Term Enterprises (SMEs) Development Policy initiated
in 2003 These policies emphasize on the need to provide soft loans to encourage enterprise
development In addition Tanzaniarsquos National Employment Policy recognizes the role played
by non-farm sector in job creation and sought to coordinate and support the sector to upscale
its operations (Katega and Lifuliro 2014) For the case of Uganda the government has over
the years given priority towards the creation of a conducive macroeconomic climate to
encourage private sector development This is being realized through road construction
ensuring reliable telecommunication services as well as access to energy In addition Ugandarsquos
poverty reduction strategy paper for 2010 laid emphasis on strengthening microfinance
institutions to make it easy and cheap for small enterprises to access credit (IMF 2010)
30 Literature Review
Lewis (1954) and Ranis and Fei (1961) suggest that allocating on-farm labor to non-farm labor
does not adversely affect agricultural productivity because marginal productivity of labor tends
towards zero In addition agricultural labor can be shifted to the industrial sector without total
agricultural output declining which implies that the agricultural shadow wage is nil Others
such as Harris and Todaro (1970) developed a rural-urban migration model where there is no
labor surplus in the agricultural sector As a result the agricultural shadow wage is always
positive However the amount of household labour available and the manner in which that
labour is allocated between critical farm and non-farm tasks as well as agriculture production
Notwithstanding household labour supply choices are not independent of on-farm activities
and vice versa (Singh et al 1986 Ranis and Stewart 1993) and therefore growth of the non-
farm activities are likely feature of structural transformation (David et al 2017) Therefore a
household decision on whether to engage in on-farm or non-farm activities is also dependent
9
on the agricultural shadow wage The implication is that households engage in on-farm activity
whenever the agricultural shadow wage exceeds the wage earned from non-farm activities
(Dimova Michaelowa and Weber 2004 Emran and Shilpi 2017) Yet Picazo-Tadeo and
Reig-Martiacutenez (2005) find a negative association between a high agricultural shadow wage rate
and family labor input which they suggest could be consistent with non-farm labor
opportunities for household members that have attained high levels of education
Various studies examining the relation between off-farm and on-farm employment suggests
that in addition to off-farm and on-farm activities complementing each other they also give
rise to positive spillover effects (see Haggblade et al 2010) For instance Savadogo et al
(1994) observes that incomes from non-farm engagements increase livestock rearing and crop
production in Burkina Faso Similarly Babatunde (2015) finds that in Nigeria non-farm
income improved farm productivity and increased purchase of farm inputs however it also led
to a decline in the use of family labour Earnings from off-farm activities were also found to
positively influence agricultural production and welfare in Ethiopia (Woldenhanna 2001 Bezu
and Holden 2014) Malawi (Adjognon et al 2017) and in Ghana Zereyesus et al (2017)
However off-farm wage employment does reduce welfare among the rich farmers than the
poor ones (Adjognon et al 2017 Scharf and Rahut 2014) In this case it may signal distress
diversification and low productivity opportunities (Haggblade et al 2010) Contrastingly
Wang et al (2015) in a more recent study for Mearttens (2008) for Senegal find that non-farm
activities withdraw labour from agriculture and hence dampening the productivity of the sector
In Ethiopia off-farm activities have reduced in on yields (Kassa et al 2017) Bezu and Holden
(2014) concluded that access to well-paying non-farm activities by household members reduces
incentives for farming which eventually reduces agricultural production and hence food
security Therefore reallocation of labour to non-farm activities will have a negative effect on
agricultural production since movement of labour force from the sector increases its marginal
product as labour becomes scarce Moreover some studies find that factors such as the level
of education are significantly linked to agricultural productivity (Haggblade et al 2010) and
non-farm participation (Matshe ampYoung 2004) Thus educated household members are likely
to opt for non-farm employment which may result in low agricultural productivity
10
4 Theoretical Framework and Econometric specification and models
41 Theoretical Framework
Using the random utility framework a farm household is assumed maximize its utility subject
to time budget production technology constraints Using Owusu et al (2011) and Adjognon
et al (2017) we can have the following model
119880 = 119880(119876 119867) (1)
119879 = 1198711 + 1198712 + 119867 (2)
119875119876 = 11990111199101 minus 11990811198711 + 11990821198712 + 119877 (3)
The farm householdrsquos utility (U) is based on consumption of goods (Q) and leisure (H) in
equation 1 The farm households total time endowment (T) is the sum of the time used in the
farm (L1) and time used in the non-farm activities (L2) as well as time to use in leisure In the
3 equation the budget constraint depends on the price of the consumption good purchased (P)
in the market using the money obtained from the price of farm output (1199011) and the output sold
in the market (1199101) wagesreturns from farm work ( 1199081 ) and off-farm ( 1199082 ) and non-labour
income (R) in equation 3 The agriculture inputs used in the production include improved seeds
fertilizers and crop protection chemicals to machinery irrigation and knowledge These inputs
help in the agriculture production farm productivity and profitability
The first order condition for the utility maximization for the work time location is
120597119880
1205971198711= 1199081
120597119880
120597119876minus
120597119880
120597119871= 0 and
120597119880
1205971198712= 1199082
120597119880
120597119876minus
120597119880
120597119871= 0
(4)
Rearranging equation 4 we get the wagesreturns from both farm and off-farm work
1199081 = (
120597119880
1205971198711120597119880
120597119876
frasl ) and 1199082 = (
120597119880
1205971198712120597119880
120597119876
frasl )
(5)
Using this equation it is possible to derive the labor supply function for the farm households
for both farm and off-farm activities as follows
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
5
Econometric specification and models are in section 4 Section 5 focuses on data and
descriptive statistics Section 6 focuses on the empirical results and discussion Section 7
20 Background of the study
In the East Africa region agriculture plays a pivotal role towards economic growth Over the
years agricultural production has enhanced economic growth poverty reduction food security
and creation of employment In addition majority of the rural poor in East Africa depend on
agriculture as their source of livelihood The agricultural sector employs about 75 of the rural
labour force in the region (Salami etal 2010) The sector is also an important source of
employment for the urban labour force According to World Bank (2011) agriculture
contributed to 28 of the gross domestic product (GDP) for the period 2005-2006 During this
period the share of agriculture to GDP in the region was 39 in Burundi 26 in Kenya 35
in Rwanda 30 in Tanzania and 25 in Uganda
Despite the importance of agriculture in East Africa its contribution to the total GDP
over the past two decades has decline significantly World Bank (2011) notes that during the
period 1990- 1995 the contribution of agriculture to the total GDP was about 40 compared
to the 28 contribution for the period 2005- 2010 However Benin et al (2010) noted that the
decline in agricultural contribution to GDP is not undesirable outcome as it is not a reflection
of the poor performance of agriculture sector Furthermore Karugia et al (2013) argues that
the decline is relative as the absolute contribution of the sector has increased over time The
authors attribute the decline in agriculture to progress in other sectors of the economy that is
the industry and the service sector thus indicating the rise of rural and structural transformation
The growth of industrial and service sector can however enhance the growth of the agricultural
sector through the creation of forward and backward linkages (IFAD 2016 Timmer 1988)
Figure 1 shows the value added per worker for the agricultural sector from 1990 to
2016 The figure indicates that agricultural productivity in East Africa has increased over the
years from USD409 to USD558 and from USD442 to USD473 for the period 1990 to 2016 for
Tanzania and Uganda respectively However there is a substantial fluctuation for Uganda for
the period 1997 to 2016
6
Figure 1 Agriculture value added per worker (constant 2010 US$)
Source World Bank (2016)
The agricultural sector in the East Africa region however faces many challenges of which low
agricultural productivity ranks very high Various factors contribute to low agricultural
productivity in the region including low use of modern technologies harsh weather conditions
pests and diseases poor infrastructure limited access to credit post- harvest losses and market
constraints (Karugia et al 2013) In addition to the low level of agricultural productivity and
high dependence on agriculture rural households also face high poverty levels
Figure 2 present poverty headcount ratio at $190 a day for Uganda and Tanzania The
figure indicates that the percentage of the population living on less than $190 a day has
decreased over time for both countries However the figures are still high with Tanzania at
466 in 2011 and 3464 for Uganda in 2012
0
100
200
300
400
500
600
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
US
$
Tanzania Uganda
7
Figure 2 Poverty headcount ratio at $190 a day (2011 PPP) ( of population)
Source World Bank (2016)
In face of low agricultural productivity and high poverty levels in rural households agriculture
alone cannot cater sufficiently for livelihood opportunities Furthermore migration is not an
option for many the rural households Thus the reallocation of labour from farm to off-farm
employment is essential in reducing rural poverty (Maritime 2001) In Africa the share of
rural non-farm income as a proportion of the total household income ranges between 40 and
50 percent (Rijkers and costa 2012) In East Africa the share stands at Tanzania is 749 and
1269 in Uganda while the contribution of farm income stands at 5721 and 5807
respectively (Nagler and Naude 2017) At least 42 of the rural households in East Africa
engage in non-farm activities (Nagler and Naude 2017) Majority of these households operate
non-farm enterprises requiring less costs and educational experience such as sales and trade In
addition literature shows that women have a higher probability to engage in off-farm activities
than men despite the constraints they encounter in terms of finance and social norms (Minniti
and Naudeacute 2010 Nagler and Naude 2017)
According to Matsumoto et al (2006) expansion of rural non-farm economy in East
Africa can play a significant role in reducing poverty if households have access to employment
opportunities However the authors found that that household with low agricultural
productivity potential are more likely to engage in non-farm activities than those with high
agricultural productivity potential Thus in this incidence it is viewed that rural non- farm
employment is a low productive sector producing low quality goods which is expected to
diminish as nation develops and income increases (Lanjouw and Lanjouw 2001) However
0
10
20
30
40
50
60
70
80
90
100
1989 1991 1992 1996 1999 2000 2002 2005 2007 2009 2011 2012
o
f popula
tion
Tanzania Uganda
8
recent literature argues that non-farm activities has the potential to increase wealth and income
in the rural sector (Barret et al 2001)
The significant contribution of agriculture to the rural economies of Tanzanian and
Uganda with 77 and 80 of the total population respectively is not in question However
due to the growing scarcity of arable land credit constraints and uncertainties associated with
farming non-farm activities have taken root as a way of supplementing reduced income from
farming as well as risk reduction (Katega and Lifuliro 2014) The governments of these
countries recognized the important of non-farm sector by implementing various policies to
improve its performance In Tanzania such policies include The National Micro-Finance
Policy of 2000 and Small and Medium-Term Enterprises (SMEs) Development Policy initiated
in 2003 These policies emphasize on the need to provide soft loans to encourage enterprise
development In addition Tanzaniarsquos National Employment Policy recognizes the role played
by non-farm sector in job creation and sought to coordinate and support the sector to upscale
its operations (Katega and Lifuliro 2014) For the case of Uganda the government has over
the years given priority towards the creation of a conducive macroeconomic climate to
encourage private sector development This is being realized through road construction
ensuring reliable telecommunication services as well as access to energy In addition Ugandarsquos
poverty reduction strategy paper for 2010 laid emphasis on strengthening microfinance
institutions to make it easy and cheap for small enterprises to access credit (IMF 2010)
30 Literature Review
Lewis (1954) and Ranis and Fei (1961) suggest that allocating on-farm labor to non-farm labor
does not adversely affect agricultural productivity because marginal productivity of labor tends
towards zero In addition agricultural labor can be shifted to the industrial sector without total
agricultural output declining which implies that the agricultural shadow wage is nil Others
such as Harris and Todaro (1970) developed a rural-urban migration model where there is no
labor surplus in the agricultural sector As a result the agricultural shadow wage is always
positive However the amount of household labour available and the manner in which that
labour is allocated between critical farm and non-farm tasks as well as agriculture production
Notwithstanding household labour supply choices are not independent of on-farm activities
and vice versa (Singh et al 1986 Ranis and Stewart 1993) and therefore growth of the non-
farm activities are likely feature of structural transformation (David et al 2017) Therefore a
household decision on whether to engage in on-farm or non-farm activities is also dependent
9
on the agricultural shadow wage The implication is that households engage in on-farm activity
whenever the agricultural shadow wage exceeds the wage earned from non-farm activities
(Dimova Michaelowa and Weber 2004 Emran and Shilpi 2017) Yet Picazo-Tadeo and
Reig-Martiacutenez (2005) find a negative association between a high agricultural shadow wage rate
and family labor input which they suggest could be consistent with non-farm labor
opportunities for household members that have attained high levels of education
Various studies examining the relation between off-farm and on-farm employment suggests
that in addition to off-farm and on-farm activities complementing each other they also give
rise to positive spillover effects (see Haggblade et al 2010) For instance Savadogo et al
(1994) observes that incomes from non-farm engagements increase livestock rearing and crop
production in Burkina Faso Similarly Babatunde (2015) finds that in Nigeria non-farm
income improved farm productivity and increased purchase of farm inputs however it also led
to a decline in the use of family labour Earnings from off-farm activities were also found to
positively influence agricultural production and welfare in Ethiopia (Woldenhanna 2001 Bezu
and Holden 2014) Malawi (Adjognon et al 2017) and in Ghana Zereyesus et al (2017)
However off-farm wage employment does reduce welfare among the rich farmers than the
poor ones (Adjognon et al 2017 Scharf and Rahut 2014) In this case it may signal distress
diversification and low productivity opportunities (Haggblade et al 2010) Contrastingly
Wang et al (2015) in a more recent study for Mearttens (2008) for Senegal find that non-farm
activities withdraw labour from agriculture and hence dampening the productivity of the sector
In Ethiopia off-farm activities have reduced in on yields (Kassa et al 2017) Bezu and Holden
(2014) concluded that access to well-paying non-farm activities by household members reduces
incentives for farming which eventually reduces agricultural production and hence food
security Therefore reallocation of labour to non-farm activities will have a negative effect on
agricultural production since movement of labour force from the sector increases its marginal
product as labour becomes scarce Moreover some studies find that factors such as the level
of education are significantly linked to agricultural productivity (Haggblade et al 2010) and
non-farm participation (Matshe ampYoung 2004) Thus educated household members are likely
to opt for non-farm employment which may result in low agricultural productivity
10
4 Theoretical Framework and Econometric specification and models
41 Theoretical Framework
Using the random utility framework a farm household is assumed maximize its utility subject
to time budget production technology constraints Using Owusu et al (2011) and Adjognon
et al (2017) we can have the following model
119880 = 119880(119876 119867) (1)
119879 = 1198711 + 1198712 + 119867 (2)
119875119876 = 11990111199101 minus 11990811198711 + 11990821198712 + 119877 (3)
The farm householdrsquos utility (U) is based on consumption of goods (Q) and leisure (H) in
equation 1 The farm households total time endowment (T) is the sum of the time used in the
farm (L1) and time used in the non-farm activities (L2) as well as time to use in leisure In the
3 equation the budget constraint depends on the price of the consumption good purchased (P)
in the market using the money obtained from the price of farm output (1199011) and the output sold
in the market (1199101) wagesreturns from farm work ( 1199081 ) and off-farm ( 1199082 ) and non-labour
income (R) in equation 3 The agriculture inputs used in the production include improved seeds
fertilizers and crop protection chemicals to machinery irrigation and knowledge These inputs
help in the agriculture production farm productivity and profitability
The first order condition for the utility maximization for the work time location is
120597119880
1205971198711= 1199081
120597119880
120597119876minus
120597119880
120597119871= 0 and
120597119880
1205971198712= 1199082
120597119880
120597119876minus
120597119880
120597119871= 0
(4)
Rearranging equation 4 we get the wagesreturns from both farm and off-farm work
1199081 = (
120597119880
1205971198711120597119880
120597119876
frasl ) and 1199082 = (
120597119880
1205971198712120597119880
120597119876
frasl )
(5)
Using this equation it is possible to derive the labor supply function for the farm households
for both farm and off-farm activities as follows
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
6
Figure 1 Agriculture value added per worker (constant 2010 US$)
Source World Bank (2016)
The agricultural sector in the East Africa region however faces many challenges of which low
agricultural productivity ranks very high Various factors contribute to low agricultural
productivity in the region including low use of modern technologies harsh weather conditions
pests and diseases poor infrastructure limited access to credit post- harvest losses and market
constraints (Karugia et al 2013) In addition to the low level of agricultural productivity and
high dependence on agriculture rural households also face high poverty levels
Figure 2 present poverty headcount ratio at $190 a day for Uganda and Tanzania The
figure indicates that the percentage of the population living on less than $190 a day has
decreased over time for both countries However the figures are still high with Tanzania at
466 in 2011 and 3464 for Uganda in 2012
0
100
200
300
400
500
600
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
US
$
Tanzania Uganda
7
Figure 2 Poverty headcount ratio at $190 a day (2011 PPP) ( of population)
Source World Bank (2016)
In face of low agricultural productivity and high poverty levels in rural households agriculture
alone cannot cater sufficiently for livelihood opportunities Furthermore migration is not an
option for many the rural households Thus the reallocation of labour from farm to off-farm
employment is essential in reducing rural poverty (Maritime 2001) In Africa the share of
rural non-farm income as a proportion of the total household income ranges between 40 and
50 percent (Rijkers and costa 2012) In East Africa the share stands at Tanzania is 749 and
1269 in Uganda while the contribution of farm income stands at 5721 and 5807
respectively (Nagler and Naude 2017) At least 42 of the rural households in East Africa
engage in non-farm activities (Nagler and Naude 2017) Majority of these households operate
non-farm enterprises requiring less costs and educational experience such as sales and trade In
addition literature shows that women have a higher probability to engage in off-farm activities
than men despite the constraints they encounter in terms of finance and social norms (Minniti
and Naudeacute 2010 Nagler and Naude 2017)
According to Matsumoto et al (2006) expansion of rural non-farm economy in East
Africa can play a significant role in reducing poverty if households have access to employment
opportunities However the authors found that that household with low agricultural
productivity potential are more likely to engage in non-farm activities than those with high
agricultural productivity potential Thus in this incidence it is viewed that rural non- farm
employment is a low productive sector producing low quality goods which is expected to
diminish as nation develops and income increases (Lanjouw and Lanjouw 2001) However
0
10
20
30
40
50
60
70
80
90
100
1989 1991 1992 1996 1999 2000 2002 2005 2007 2009 2011 2012
o
f popula
tion
Tanzania Uganda
8
recent literature argues that non-farm activities has the potential to increase wealth and income
in the rural sector (Barret et al 2001)
The significant contribution of agriculture to the rural economies of Tanzanian and
Uganda with 77 and 80 of the total population respectively is not in question However
due to the growing scarcity of arable land credit constraints and uncertainties associated with
farming non-farm activities have taken root as a way of supplementing reduced income from
farming as well as risk reduction (Katega and Lifuliro 2014) The governments of these
countries recognized the important of non-farm sector by implementing various policies to
improve its performance In Tanzania such policies include The National Micro-Finance
Policy of 2000 and Small and Medium-Term Enterprises (SMEs) Development Policy initiated
in 2003 These policies emphasize on the need to provide soft loans to encourage enterprise
development In addition Tanzaniarsquos National Employment Policy recognizes the role played
by non-farm sector in job creation and sought to coordinate and support the sector to upscale
its operations (Katega and Lifuliro 2014) For the case of Uganda the government has over
the years given priority towards the creation of a conducive macroeconomic climate to
encourage private sector development This is being realized through road construction
ensuring reliable telecommunication services as well as access to energy In addition Ugandarsquos
poverty reduction strategy paper for 2010 laid emphasis on strengthening microfinance
institutions to make it easy and cheap for small enterprises to access credit (IMF 2010)
30 Literature Review
Lewis (1954) and Ranis and Fei (1961) suggest that allocating on-farm labor to non-farm labor
does not adversely affect agricultural productivity because marginal productivity of labor tends
towards zero In addition agricultural labor can be shifted to the industrial sector without total
agricultural output declining which implies that the agricultural shadow wage is nil Others
such as Harris and Todaro (1970) developed a rural-urban migration model where there is no
labor surplus in the agricultural sector As a result the agricultural shadow wage is always
positive However the amount of household labour available and the manner in which that
labour is allocated between critical farm and non-farm tasks as well as agriculture production
Notwithstanding household labour supply choices are not independent of on-farm activities
and vice versa (Singh et al 1986 Ranis and Stewart 1993) and therefore growth of the non-
farm activities are likely feature of structural transformation (David et al 2017) Therefore a
household decision on whether to engage in on-farm or non-farm activities is also dependent
9
on the agricultural shadow wage The implication is that households engage in on-farm activity
whenever the agricultural shadow wage exceeds the wage earned from non-farm activities
(Dimova Michaelowa and Weber 2004 Emran and Shilpi 2017) Yet Picazo-Tadeo and
Reig-Martiacutenez (2005) find a negative association between a high agricultural shadow wage rate
and family labor input which they suggest could be consistent with non-farm labor
opportunities for household members that have attained high levels of education
Various studies examining the relation between off-farm and on-farm employment suggests
that in addition to off-farm and on-farm activities complementing each other they also give
rise to positive spillover effects (see Haggblade et al 2010) For instance Savadogo et al
(1994) observes that incomes from non-farm engagements increase livestock rearing and crop
production in Burkina Faso Similarly Babatunde (2015) finds that in Nigeria non-farm
income improved farm productivity and increased purchase of farm inputs however it also led
to a decline in the use of family labour Earnings from off-farm activities were also found to
positively influence agricultural production and welfare in Ethiopia (Woldenhanna 2001 Bezu
and Holden 2014) Malawi (Adjognon et al 2017) and in Ghana Zereyesus et al (2017)
However off-farm wage employment does reduce welfare among the rich farmers than the
poor ones (Adjognon et al 2017 Scharf and Rahut 2014) In this case it may signal distress
diversification and low productivity opportunities (Haggblade et al 2010) Contrastingly
Wang et al (2015) in a more recent study for Mearttens (2008) for Senegal find that non-farm
activities withdraw labour from agriculture and hence dampening the productivity of the sector
In Ethiopia off-farm activities have reduced in on yields (Kassa et al 2017) Bezu and Holden
(2014) concluded that access to well-paying non-farm activities by household members reduces
incentives for farming which eventually reduces agricultural production and hence food
security Therefore reallocation of labour to non-farm activities will have a negative effect on
agricultural production since movement of labour force from the sector increases its marginal
product as labour becomes scarce Moreover some studies find that factors such as the level
of education are significantly linked to agricultural productivity (Haggblade et al 2010) and
non-farm participation (Matshe ampYoung 2004) Thus educated household members are likely
to opt for non-farm employment which may result in low agricultural productivity
10
4 Theoretical Framework and Econometric specification and models
41 Theoretical Framework
Using the random utility framework a farm household is assumed maximize its utility subject
to time budget production technology constraints Using Owusu et al (2011) and Adjognon
et al (2017) we can have the following model
119880 = 119880(119876 119867) (1)
119879 = 1198711 + 1198712 + 119867 (2)
119875119876 = 11990111199101 minus 11990811198711 + 11990821198712 + 119877 (3)
The farm householdrsquos utility (U) is based on consumption of goods (Q) and leisure (H) in
equation 1 The farm households total time endowment (T) is the sum of the time used in the
farm (L1) and time used in the non-farm activities (L2) as well as time to use in leisure In the
3 equation the budget constraint depends on the price of the consumption good purchased (P)
in the market using the money obtained from the price of farm output (1199011) and the output sold
in the market (1199101) wagesreturns from farm work ( 1199081 ) and off-farm ( 1199082 ) and non-labour
income (R) in equation 3 The agriculture inputs used in the production include improved seeds
fertilizers and crop protection chemicals to machinery irrigation and knowledge These inputs
help in the agriculture production farm productivity and profitability
The first order condition for the utility maximization for the work time location is
120597119880
1205971198711= 1199081
120597119880
120597119876minus
120597119880
120597119871= 0 and
120597119880
1205971198712= 1199082
120597119880
120597119876minus
120597119880
120597119871= 0
(4)
Rearranging equation 4 we get the wagesreturns from both farm and off-farm work
1199081 = (
120597119880
1205971198711120597119880
120597119876
frasl ) and 1199082 = (
120597119880
1205971198712120597119880
120597119876
frasl )
(5)
Using this equation it is possible to derive the labor supply function for the farm households
for both farm and off-farm activities as follows
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
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African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
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Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
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Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
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Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
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Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
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World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
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Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
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7
Figure 2 Poverty headcount ratio at $190 a day (2011 PPP) ( of population)
Source World Bank (2016)
In face of low agricultural productivity and high poverty levels in rural households agriculture
alone cannot cater sufficiently for livelihood opportunities Furthermore migration is not an
option for many the rural households Thus the reallocation of labour from farm to off-farm
employment is essential in reducing rural poverty (Maritime 2001) In Africa the share of
rural non-farm income as a proportion of the total household income ranges between 40 and
50 percent (Rijkers and costa 2012) In East Africa the share stands at Tanzania is 749 and
1269 in Uganda while the contribution of farm income stands at 5721 and 5807
respectively (Nagler and Naude 2017) At least 42 of the rural households in East Africa
engage in non-farm activities (Nagler and Naude 2017) Majority of these households operate
non-farm enterprises requiring less costs and educational experience such as sales and trade In
addition literature shows that women have a higher probability to engage in off-farm activities
than men despite the constraints they encounter in terms of finance and social norms (Minniti
and Naudeacute 2010 Nagler and Naude 2017)
According to Matsumoto et al (2006) expansion of rural non-farm economy in East
Africa can play a significant role in reducing poverty if households have access to employment
opportunities However the authors found that that household with low agricultural
productivity potential are more likely to engage in non-farm activities than those with high
agricultural productivity potential Thus in this incidence it is viewed that rural non- farm
employment is a low productive sector producing low quality goods which is expected to
diminish as nation develops and income increases (Lanjouw and Lanjouw 2001) However
0
10
20
30
40
50
60
70
80
90
100
1989 1991 1992 1996 1999 2000 2002 2005 2007 2009 2011 2012
o
f popula
tion
Tanzania Uganda
8
recent literature argues that non-farm activities has the potential to increase wealth and income
in the rural sector (Barret et al 2001)
The significant contribution of agriculture to the rural economies of Tanzanian and
Uganda with 77 and 80 of the total population respectively is not in question However
due to the growing scarcity of arable land credit constraints and uncertainties associated with
farming non-farm activities have taken root as a way of supplementing reduced income from
farming as well as risk reduction (Katega and Lifuliro 2014) The governments of these
countries recognized the important of non-farm sector by implementing various policies to
improve its performance In Tanzania such policies include The National Micro-Finance
Policy of 2000 and Small and Medium-Term Enterprises (SMEs) Development Policy initiated
in 2003 These policies emphasize on the need to provide soft loans to encourage enterprise
development In addition Tanzaniarsquos National Employment Policy recognizes the role played
by non-farm sector in job creation and sought to coordinate and support the sector to upscale
its operations (Katega and Lifuliro 2014) For the case of Uganda the government has over
the years given priority towards the creation of a conducive macroeconomic climate to
encourage private sector development This is being realized through road construction
ensuring reliable telecommunication services as well as access to energy In addition Ugandarsquos
poverty reduction strategy paper for 2010 laid emphasis on strengthening microfinance
institutions to make it easy and cheap for small enterprises to access credit (IMF 2010)
30 Literature Review
Lewis (1954) and Ranis and Fei (1961) suggest that allocating on-farm labor to non-farm labor
does not adversely affect agricultural productivity because marginal productivity of labor tends
towards zero In addition agricultural labor can be shifted to the industrial sector without total
agricultural output declining which implies that the agricultural shadow wage is nil Others
such as Harris and Todaro (1970) developed a rural-urban migration model where there is no
labor surplus in the agricultural sector As a result the agricultural shadow wage is always
positive However the amount of household labour available and the manner in which that
labour is allocated between critical farm and non-farm tasks as well as agriculture production
Notwithstanding household labour supply choices are not independent of on-farm activities
and vice versa (Singh et al 1986 Ranis and Stewart 1993) and therefore growth of the non-
farm activities are likely feature of structural transformation (David et al 2017) Therefore a
household decision on whether to engage in on-farm or non-farm activities is also dependent
9
on the agricultural shadow wage The implication is that households engage in on-farm activity
whenever the agricultural shadow wage exceeds the wage earned from non-farm activities
(Dimova Michaelowa and Weber 2004 Emran and Shilpi 2017) Yet Picazo-Tadeo and
Reig-Martiacutenez (2005) find a negative association between a high agricultural shadow wage rate
and family labor input which they suggest could be consistent with non-farm labor
opportunities for household members that have attained high levels of education
Various studies examining the relation between off-farm and on-farm employment suggests
that in addition to off-farm and on-farm activities complementing each other they also give
rise to positive spillover effects (see Haggblade et al 2010) For instance Savadogo et al
(1994) observes that incomes from non-farm engagements increase livestock rearing and crop
production in Burkina Faso Similarly Babatunde (2015) finds that in Nigeria non-farm
income improved farm productivity and increased purchase of farm inputs however it also led
to a decline in the use of family labour Earnings from off-farm activities were also found to
positively influence agricultural production and welfare in Ethiopia (Woldenhanna 2001 Bezu
and Holden 2014) Malawi (Adjognon et al 2017) and in Ghana Zereyesus et al (2017)
However off-farm wage employment does reduce welfare among the rich farmers than the
poor ones (Adjognon et al 2017 Scharf and Rahut 2014) In this case it may signal distress
diversification and low productivity opportunities (Haggblade et al 2010) Contrastingly
Wang et al (2015) in a more recent study for Mearttens (2008) for Senegal find that non-farm
activities withdraw labour from agriculture and hence dampening the productivity of the sector
In Ethiopia off-farm activities have reduced in on yields (Kassa et al 2017) Bezu and Holden
(2014) concluded that access to well-paying non-farm activities by household members reduces
incentives for farming which eventually reduces agricultural production and hence food
security Therefore reallocation of labour to non-farm activities will have a negative effect on
agricultural production since movement of labour force from the sector increases its marginal
product as labour becomes scarce Moreover some studies find that factors such as the level
of education are significantly linked to agricultural productivity (Haggblade et al 2010) and
non-farm participation (Matshe ampYoung 2004) Thus educated household members are likely
to opt for non-farm employment which may result in low agricultural productivity
10
4 Theoretical Framework and Econometric specification and models
41 Theoretical Framework
Using the random utility framework a farm household is assumed maximize its utility subject
to time budget production technology constraints Using Owusu et al (2011) and Adjognon
et al (2017) we can have the following model
119880 = 119880(119876 119867) (1)
119879 = 1198711 + 1198712 + 119867 (2)
119875119876 = 11990111199101 minus 11990811198711 + 11990821198712 + 119877 (3)
The farm householdrsquos utility (U) is based on consumption of goods (Q) and leisure (H) in
equation 1 The farm households total time endowment (T) is the sum of the time used in the
farm (L1) and time used in the non-farm activities (L2) as well as time to use in leisure In the
3 equation the budget constraint depends on the price of the consumption good purchased (P)
in the market using the money obtained from the price of farm output (1199011) and the output sold
in the market (1199101) wagesreturns from farm work ( 1199081 ) and off-farm ( 1199082 ) and non-labour
income (R) in equation 3 The agriculture inputs used in the production include improved seeds
fertilizers and crop protection chemicals to machinery irrigation and knowledge These inputs
help in the agriculture production farm productivity and profitability
The first order condition for the utility maximization for the work time location is
120597119880
1205971198711= 1199081
120597119880
120597119876minus
120597119880
120597119871= 0 and
120597119880
1205971198712= 1199082
120597119880
120597119876minus
120597119880
120597119871= 0
(4)
Rearranging equation 4 we get the wagesreturns from both farm and off-farm work
1199081 = (
120597119880
1205971198711120597119880
120597119876
frasl ) and 1199082 = (
120597119880
1205971198712120597119880
120597119876
frasl )
(5)
Using this equation it is possible to derive the labor supply function for the farm households
for both farm and off-farm activities as follows
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
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Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
8
recent literature argues that non-farm activities has the potential to increase wealth and income
in the rural sector (Barret et al 2001)
The significant contribution of agriculture to the rural economies of Tanzanian and
Uganda with 77 and 80 of the total population respectively is not in question However
due to the growing scarcity of arable land credit constraints and uncertainties associated with
farming non-farm activities have taken root as a way of supplementing reduced income from
farming as well as risk reduction (Katega and Lifuliro 2014) The governments of these
countries recognized the important of non-farm sector by implementing various policies to
improve its performance In Tanzania such policies include The National Micro-Finance
Policy of 2000 and Small and Medium-Term Enterprises (SMEs) Development Policy initiated
in 2003 These policies emphasize on the need to provide soft loans to encourage enterprise
development In addition Tanzaniarsquos National Employment Policy recognizes the role played
by non-farm sector in job creation and sought to coordinate and support the sector to upscale
its operations (Katega and Lifuliro 2014) For the case of Uganda the government has over
the years given priority towards the creation of a conducive macroeconomic climate to
encourage private sector development This is being realized through road construction
ensuring reliable telecommunication services as well as access to energy In addition Ugandarsquos
poverty reduction strategy paper for 2010 laid emphasis on strengthening microfinance
institutions to make it easy and cheap for small enterprises to access credit (IMF 2010)
30 Literature Review
Lewis (1954) and Ranis and Fei (1961) suggest that allocating on-farm labor to non-farm labor
does not adversely affect agricultural productivity because marginal productivity of labor tends
towards zero In addition agricultural labor can be shifted to the industrial sector without total
agricultural output declining which implies that the agricultural shadow wage is nil Others
such as Harris and Todaro (1970) developed a rural-urban migration model where there is no
labor surplus in the agricultural sector As a result the agricultural shadow wage is always
positive However the amount of household labour available and the manner in which that
labour is allocated between critical farm and non-farm tasks as well as agriculture production
Notwithstanding household labour supply choices are not independent of on-farm activities
and vice versa (Singh et al 1986 Ranis and Stewart 1993) and therefore growth of the non-
farm activities are likely feature of structural transformation (David et al 2017) Therefore a
household decision on whether to engage in on-farm or non-farm activities is also dependent
9
on the agricultural shadow wage The implication is that households engage in on-farm activity
whenever the agricultural shadow wage exceeds the wage earned from non-farm activities
(Dimova Michaelowa and Weber 2004 Emran and Shilpi 2017) Yet Picazo-Tadeo and
Reig-Martiacutenez (2005) find a negative association between a high agricultural shadow wage rate
and family labor input which they suggest could be consistent with non-farm labor
opportunities for household members that have attained high levels of education
Various studies examining the relation between off-farm and on-farm employment suggests
that in addition to off-farm and on-farm activities complementing each other they also give
rise to positive spillover effects (see Haggblade et al 2010) For instance Savadogo et al
(1994) observes that incomes from non-farm engagements increase livestock rearing and crop
production in Burkina Faso Similarly Babatunde (2015) finds that in Nigeria non-farm
income improved farm productivity and increased purchase of farm inputs however it also led
to a decline in the use of family labour Earnings from off-farm activities were also found to
positively influence agricultural production and welfare in Ethiopia (Woldenhanna 2001 Bezu
and Holden 2014) Malawi (Adjognon et al 2017) and in Ghana Zereyesus et al (2017)
However off-farm wage employment does reduce welfare among the rich farmers than the
poor ones (Adjognon et al 2017 Scharf and Rahut 2014) In this case it may signal distress
diversification and low productivity opportunities (Haggblade et al 2010) Contrastingly
Wang et al (2015) in a more recent study for Mearttens (2008) for Senegal find that non-farm
activities withdraw labour from agriculture and hence dampening the productivity of the sector
In Ethiopia off-farm activities have reduced in on yields (Kassa et al 2017) Bezu and Holden
(2014) concluded that access to well-paying non-farm activities by household members reduces
incentives for farming which eventually reduces agricultural production and hence food
security Therefore reallocation of labour to non-farm activities will have a negative effect on
agricultural production since movement of labour force from the sector increases its marginal
product as labour becomes scarce Moreover some studies find that factors such as the level
of education are significantly linked to agricultural productivity (Haggblade et al 2010) and
non-farm participation (Matshe ampYoung 2004) Thus educated household members are likely
to opt for non-farm employment which may result in low agricultural productivity
10
4 Theoretical Framework and Econometric specification and models
41 Theoretical Framework
Using the random utility framework a farm household is assumed maximize its utility subject
to time budget production technology constraints Using Owusu et al (2011) and Adjognon
et al (2017) we can have the following model
119880 = 119880(119876 119867) (1)
119879 = 1198711 + 1198712 + 119867 (2)
119875119876 = 11990111199101 minus 11990811198711 + 11990821198712 + 119877 (3)
The farm householdrsquos utility (U) is based on consumption of goods (Q) and leisure (H) in
equation 1 The farm households total time endowment (T) is the sum of the time used in the
farm (L1) and time used in the non-farm activities (L2) as well as time to use in leisure In the
3 equation the budget constraint depends on the price of the consumption good purchased (P)
in the market using the money obtained from the price of farm output (1199011) and the output sold
in the market (1199101) wagesreturns from farm work ( 1199081 ) and off-farm ( 1199082 ) and non-labour
income (R) in equation 3 The agriculture inputs used in the production include improved seeds
fertilizers and crop protection chemicals to machinery irrigation and knowledge These inputs
help in the agriculture production farm productivity and profitability
The first order condition for the utility maximization for the work time location is
120597119880
1205971198711= 1199081
120597119880
120597119876minus
120597119880
120597119871= 0 and
120597119880
1205971198712= 1199082
120597119880
120597119876minus
120597119880
120597119871= 0
(4)
Rearranging equation 4 we get the wagesreturns from both farm and off-farm work
1199081 = (
120597119880
1205971198711120597119880
120597119876
frasl ) and 1199082 = (
120597119880
1205971198712120597119880
120597119876
frasl )
(5)
Using this equation it is possible to derive the labor supply function for the farm households
for both farm and off-farm activities as follows
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
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poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
9
on the agricultural shadow wage The implication is that households engage in on-farm activity
whenever the agricultural shadow wage exceeds the wage earned from non-farm activities
(Dimova Michaelowa and Weber 2004 Emran and Shilpi 2017) Yet Picazo-Tadeo and
Reig-Martiacutenez (2005) find a negative association between a high agricultural shadow wage rate
and family labor input which they suggest could be consistent with non-farm labor
opportunities for household members that have attained high levels of education
Various studies examining the relation between off-farm and on-farm employment suggests
that in addition to off-farm and on-farm activities complementing each other they also give
rise to positive spillover effects (see Haggblade et al 2010) For instance Savadogo et al
(1994) observes that incomes from non-farm engagements increase livestock rearing and crop
production in Burkina Faso Similarly Babatunde (2015) finds that in Nigeria non-farm
income improved farm productivity and increased purchase of farm inputs however it also led
to a decline in the use of family labour Earnings from off-farm activities were also found to
positively influence agricultural production and welfare in Ethiopia (Woldenhanna 2001 Bezu
and Holden 2014) Malawi (Adjognon et al 2017) and in Ghana Zereyesus et al (2017)
However off-farm wage employment does reduce welfare among the rich farmers than the
poor ones (Adjognon et al 2017 Scharf and Rahut 2014) In this case it may signal distress
diversification and low productivity opportunities (Haggblade et al 2010) Contrastingly
Wang et al (2015) in a more recent study for Mearttens (2008) for Senegal find that non-farm
activities withdraw labour from agriculture and hence dampening the productivity of the sector
In Ethiopia off-farm activities have reduced in on yields (Kassa et al 2017) Bezu and Holden
(2014) concluded that access to well-paying non-farm activities by household members reduces
incentives for farming which eventually reduces agricultural production and hence food
security Therefore reallocation of labour to non-farm activities will have a negative effect on
agricultural production since movement of labour force from the sector increases its marginal
product as labour becomes scarce Moreover some studies find that factors such as the level
of education are significantly linked to agricultural productivity (Haggblade et al 2010) and
non-farm participation (Matshe ampYoung 2004) Thus educated household members are likely
to opt for non-farm employment which may result in low agricultural productivity
10
4 Theoretical Framework and Econometric specification and models
41 Theoretical Framework
Using the random utility framework a farm household is assumed maximize its utility subject
to time budget production technology constraints Using Owusu et al (2011) and Adjognon
et al (2017) we can have the following model
119880 = 119880(119876 119867) (1)
119879 = 1198711 + 1198712 + 119867 (2)
119875119876 = 11990111199101 minus 11990811198711 + 11990821198712 + 119877 (3)
The farm householdrsquos utility (U) is based on consumption of goods (Q) and leisure (H) in
equation 1 The farm households total time endowment (T) is the sum of the time used in the
farm (L1) and time used in the non-farm activities (L2) as well as time to use in leisure In the
3 equation the budget constraint depends on the price of the consumption good purchased (P)
in the market using the money obtained from the price of farm output (1199011) and the output sold
in the market (1199101) wagesreturns from farm work ( 1199081 ) and off-farm ( 1199082 ) and non-labour
income (R) in equation 3 The agriculture inputs used in the production include improved seeds
fertilizers and crop protection chemicals to machinery irrigation and knowledge These inputs
help in the agriculture production farm productivity and profitability
The first order condition for the utility maximization for the work time location is
120597119880
1205971198711= 1199081
120597119880
120597119876minus
120597119880
120597119871= 0 and
120597119880
1205971198712= 1199082
120597119880
120597119876minus
120597119880
120597119871= 0
(4)
Rearranging equation 4 we get the wagesreturns from both farm and off-farm work
1199081 = (
120597119880
1205971198711120597119880
120597119876
frasl ) and 1199082 = (
120597119880
1205971198712120597119880
120597119876
frasl )
(5)
Using this equation it is possible to derive the labor supply function for the farm households
for both farm and off-farm activities as follows
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
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Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
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Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
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Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
10
4 Theoretical Framework and Econometric specification and models
41 Theoretical Framework
Using the random utility framework a farm household is assumed maximize its utility subject
to time budget production technology constraints Using Owusu et al (2011) and Adjognon
et al (2017) we can have the following model
119880 = 119880(119876 119867) (1)
119879 = 1198711 + 1198712 + 119867 (2)
119875119876 = 11990111199101 minus 11990811198711 + 11990821198712 + 119877 (3)
The farm householdrsquos utility (U) is based on consumption of goods (Q) and leisure (H) in
equation 1 The farm households total time endowment (T) is the sum of the time used in the
farm (L1) and time used in the non-farm activities (L2) as well as time to use in leisure In the
3 equation the budget constraint depends on the price of the consumption good purchased (P)
in the market using the money obtained from the price of farm output (1199011) and the output sold
in the market (1199101) wagesreturns from farm work ( 1199081 ) and off-farm ( 1199082 ) and non-labour
income (R) in equation 3 The agriculture inputs used in the production include improved seeds
fertilizers and crop protection chemicals to machinery irrigation and knowledge These inputs
help in the agriculture production farm productivity and profitability
The first order condition for the utility maximization for the work time location is
120597119880
1205971198711= 1199081
120597119880
120597119876minus
120597119880
120597119871= 0 and
120597119880
1205971198712= 1199082
120597119880
120597119876minus
120597119880
120597119871= 0
(4)
Rearranging equation 4 we get the wagesreturns from both farm and off-farm work
1199081 = (
120597119880
1205971198711120597119880
120597119876
frasl ) and 1199082 = (
120597119880
1205971198712120597119880
120597119876
frasl )
(5)
Using this equation it is possible to derive the labor supply function for the farm households
for both farm and off-farm activities as follows
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
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Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
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Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
11
1198711 = 1198711(1199081 1199082 1199011 1199012119885) and 1198712 = 1198712(1199081 1199082 1199011 1199012 119877 119885)
(6)
Z is the household characteristics that influence decision of the farm households to use labor
in the farm and off-farm activities P2 is the prices of non-produced products by the farmers A
positive number of off-farm hours will be observed in individual i when the potential market
wage is more than the reservation wage In addition the households will use off-farm activities
when there is availability of demand in different periods (Doff) Therefore L2 lt=Doff
However this is not observed but itrsquos the decision to participate in the on farm or off-farm
activities (off) that we observe The decision to participate in off-farm activities can be
developed as below
119900119891119891119894119905lowast = 1205720 + 1205721119885119894119905 + 120572119894minus1119883119894119905 + 120574119894119905 if 119900119891119891119894119905 =
1 119894119891 119900119891119891119894119905lowast gt 0
0 119900119905ℎ119890119903119908119894119904119890 (7)
The observed decision if will be equal to 1 if the household participates in off-farm activities
and zero if the households does not participate X are other factors that might influence the
decision to participate in off farm activities other than the householdrsquos characteristics (Z) 120574119894119905
is the error term We can show the effects of off-farm activities on farmersrsquo outcomes as
follows
119884119894119905 = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 (8)
where the Yit is the farmers outcomes such as agriculture production and welfare
42 Econometric specification and models
For panel estimates there are three popular models are extensively used Pooled Data model
(PM) Fixed-Effects Model (FE) and Random Effects Model (RE) In pooled model we assume
that the cross-section data for the different periods are independent of each other As a result
it is assumed that Ordinary Least Squares (OLS) assumptions are not violated that the constant
the same across all units and that the effects of any independent variable on the dependent
variable is constant across the observation Consequently serial correlation of residuals is not
an issue when regression analysis is applied ie the error term is assumed to be homoscedastic
and uncorrelated both within the units and across time With panel data units of analysis have
time series properties in the cross section We randomly select the cross-section only once and
12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
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Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
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Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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12
then we follow the unit within this cross-section over time Therefore with panel data we
cannot assume that the observations independently distributed across time and therefore serial
correlation of residuals become important As a result there could be unobserved factors that
can influence the unit of analysis over time Omitting these factors in the model may induce
severe bias to all the parameter estimates
The selection of the panel model will depend on how to model the error term The error term
120585119894119905 = 120583119894 + 휀119894119905 ie within units and across time Fixed Effect (FE) model is better when
covariance between the independent variables and the error term is itrsquos not equal to zero ie
Cov(119883119894119905 120585119894119905) ne 0 while Random Effect (RE) is used when the Cov(119883119894119905 120585119894119905) = 0 The RE is a
model situated between the PM and the FE Hausman test is used to check for the best model
bull 119867119874 120573119877119864 minus 120573119865119864 = 0
bull 1198671 120573119877119864 minus 120573119865119864 ne 0
We can reject 119867119874 if the probability is less than 005 and use the FE model
Apart from the issues presented above the participation and outcome models need to be
censored because there is an accumulation of observations at the limits of the range of the
variables The lower limit of the range is usually zero and the censoring is usually zero
censoring as shown in equation 7 Similarly in question 8 we can have the following model
119884119894119905lowast = 1205730 + 120575119905 + 1205731119874119891119891119894119905 + 120573119894minus1119883119894119905 + 120585119894119905 9
119884119894119905 = 119884119894119905lowast 119894119891 119884119894119905
lowast gt 0
119884119894119905 = 0 119894119891 119884119894119905lowast le 0
As a result we have lower censoring at zero which results in two regimes of behavior zero
observations and positive observations In addition households may self-select into on-farm or
off-farm participation based on productivity gains by investing in individuals and consequently
assigning skilled individuals to off-farm activities based on observable and unobservable
characteristics that are correlated with expected earnings from off-farm participation Hence
determination of agricultural productivity and rural household welfare is likely to cause high
correlation between unobservable characteristics affecting agricultural productivity and
household welfare and characteristics that simultaneously determine whether an individual
participates in on-farm or off-farm activities
13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
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Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
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Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
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Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
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World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
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Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
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Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
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13
We therefore use a selection bias correction model using the double-hurdle model The first
hurdle is the participation decision which is the decision of the households engage in off-farm
activities followed by the second hurdle (outcome decision) which is both agriculture
production productivity and farmers welfare The first hurdle the households decide where
they will be engaged off-farm activities or not The second hurdle contains a households-
specific random-effects term (120583119894) between households for heterogeneity and thereby within-
household dependence The double hurdle model contains two equations combined both probit
and tobit estimations The variance of error term 120574119894119905 in equation 7 is normalized to 1 for
identification purposes as the first hurdle is binary
(120574119894119905120585119894119905
) ~119873[(00) ( 1 0
0 1205902)] 10
The diagonal form of the covariance matrix assumes that the two error terms are independently
distributed The second hurdle resembles the tobit model and the double hurdle model is
expressed as a log-likelihood function as shown in Enge1 and Moffatt (2014)
Finally we use Generalized Structural Equation Model (GSEM) which allows for
generalized linear response variables and multi-level mixed effects Using this model it is
possible to fit binary variables using different specifications such as probit among other
models In addition it places latent variables at different levels of the data and can be used for
both random and fixed effects in the model In addition this model can be used for selection
bias and endogeneity The GSEM likelihood function is based on maximum likelihood function
and assumes conditional normality and that the latent variables are normally distributed
We model the decision to engage in off-farm activity as a function of household
characteristics farm characteristics distances regions and climate factors We then examine
the impact of off-participation in both agriculture production and welfare To do this we use
instrumental variables in both countries due to the possible endogeneity between off-farm
participation and the farmersrsquo outcomes Yearly sampling weights are also used for restoring
population representativeness in the data We take care of attrition by using panel weights
available in each wave which is based on samples in each sub-population (stratum) within the
overall population Given that we have a lot of variables and households it is possible that
although there sample selection there is the possibility of some of the data might be missing
However if we exclude the households because of that would lose a lot of information that is
important in this exercise In the last equation we use GSEM fixed effects model and we
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
14
include only households that are included in the surveys at least two time and we compare with
the other models to take care of attrition The variables used in the empirical estimations are
described in Table 1
5 Data and descriptive statistics
51 Data
To estimate our model we employ data from the Living Standards Measurement Study-
Integrated Surveys on Agriculture (LSMS-ISA) arising from the Tanzania National Panel
Survey for the period 2008-2013 and Uganda National Panel Survey for the period 2005-2014
(wwwworldbankorg) The surveys involved administering interviews for collecting data from
three units of analysis comprising individuals household and communities The nationally
representative geo-referenced data contains detailed plot level agricultural information as well
as data on non-agricultural facets of householdsrsquo livelihoods encompassing employment
income consumption shocks assets nutrition
In Tanzania the first round of households surveyed consisted of 3265 households that
were a nationally representative sample All households interviewed in the first round were
targeted for a revisit in the second-round survey with households residing in their original
location being interviewed Households that had relocated were tracked and interviewed in
their new location and household The sample size for the second round and third round
subsequently expanded and was 3924 households and 5017 households respectively In
Uganda the first round of the sample had about 3123 households all of whom had been
previously interviewed as part of the 20052006 Uganda National Household Survey (UNHS)
The sample was representative of the national population comprising urban and rural regions
including the North East West and Central regions This sample was visited for three
consecutive years (200910 201011 20112012)
52 Descriptive statistics
The study had two-stage dependent variables The first-stage dependent variable had four
dependent variables as a discrete choice between four exclusive alternatives including (1) on-
farm employment (2) wage employment (3) self-employment (4) other employment (eg
mining and tourism) Table 3 shows that for Tanzania about 81 percent of the household heads
engage in on-farm employment 8 percent engage in wage employment 9 percent engage in
self-employment and 2 percent engage in other employment including mining and tourism
Contrastingly Table 4 reveals that in Uganda about 64 percent of household heads engage in
on-farm employment 26 percent engage in wage employment and 9 percent in self-
15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
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Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
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Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
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Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
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Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
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Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
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Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
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De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
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Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
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Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
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Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
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27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
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IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
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Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
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httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
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Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
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Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
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Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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15
employment respectively Only 06 percent engage in other forms of employment The second-
stage dependent variable relates to agricultural productivity and household welfare These
values are reported in Tanzania Shillings in Table 3 and Uganda Shillings in Table 4
respectively
We also highlight mean values for explanatory variables while noting that not all factors
were controlled for in the study These are indicated in Tables 3 and 4 for Tanzania and Uganda
respectively From the household characteristics we note that majority of the households are
male headed in both countries The mean age of a household head in Tanzania is about 47 years
whilst that of Uganda is about 45 years Stark differences are observed with respect to all
measures of formal education with Tanzania having lower mean values on all measures relative
to Uganda Tanzania also has a lower mean value on household size relative to Uganda From
the plot characteristics only 5 percent of the households in Tanzania have land ownership titles
relative to 72 percent of households in Uganda Furthermore 18 percent of the households in
Tanzania report that their parcels of land have good soil This is a marked contrast to
households in Uganda where 81 percent of the households report a higher incidence of good
soil Considering resources we observe that the mean value of farm size for Tanzania at 594
acres is much higher than that of Ugandarsquos 229 acres Notwithstanding Tanzania reports a
slightly lower mean value on farm productive assets relative to Uganda Similarly Tanzania
reports lower mean values on the rest of the resources including access to credit remittance
extension services hired labour and use of improved seed Lastly we observe that 80 percent
of the households in Tanzania report experiencing shocks relative to 29 percent of households
in Uganda
Furthermore the study presents parametric regressions indicating the probabilities of
participation in on-farm or off-farm activities based on agricultural productivity welfare
gender and age of the household heads in Figures 3-6 Figure 3a shows that male and female
household heads in Tanzania would participate in off-farm work at a relatively lower
agricultural production Similar results are reported for the case of Uganda (see Figure 3b) In
addition Figures 4a and 4b shows that welfare among male headed households increases with
increase in agricultural production for both countries with regard to off-farm participation
Similar findings are observed with female headed households for both Tanzania and Uganda
(see Figures 5a and 5b) Finally Figures 6a and 6a confirms that in both countries young
people have higher probability of participating in off-farm activities and their participation
declines as they advance in age
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
16
6 Empirical Results and Discussions
61 Factors that influence Off-farm participation
Findings on factors which explain householdsrsquo participation in off-farm activities are
presented in Tables 5 and 6 for Tanzania and Uganda respectively The results indicate that in
Tanzania male headed households are pro-off-farm activities while in Uganda we observe a
negative sign which show that majority of male-headed households prefer on-farm
employment The coefficients of age and age squared for Tanzania show that as people get
older they tend to shift away from on-farm to off-farm employment In Uganda age was not a
significant factor While formal education was positively related to off-farm employment in
Tanzania it was negative for Ugandan case These was supported by Oseni and Winters (2009)
Active labour force was also found to be pro-off-farm employment in both countries However
the sign on the coefficients of quadratic terms show that the effect of family labour force on
off-farm employment declines with an increase in the family labour force Access to credit
positively influence participation in off-farm activities in Tanzania while for Uganda farm
ownership household size cost of inputs farm assets and remittances have positive influence
on off-farm employment
On the other hand the study observes negative and significant relationship between
farm productive assets transport on agricultural produce yields and sales for the case of
Tanzania In Uganda farm productive assets are positively related to off-farm employment
The results imply that a decline in agricultural produce and sales is excepted to discourage
farmers who will then look for other forms of employment to sustain their livelihoods in
Tanzania Similar situation is reported regarding farm assets However the negative sign of the
transport cost variable was not excepted Distance to the market household networks were also
negatively related to off-farm employment
In summary we find that age gender agricultural produce formal education of the
household head family labour cost of inputs farm size and access to credit are key
determinants of labour re-allocation from on-farm to off-farm in Tanzania For Uganda key
determinants include gender formal education family labour farm assets household size
cost of inputs land ownership and remittances
62 Off-farm participation and agricultural production
Estimated results regarding the impact of off-farm participation on agricultural
productivity are reported in Tables 7 and 8 for Tanzania and Uganda respectively Before
17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
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Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
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Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
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Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
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Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
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Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
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Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
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De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
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Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
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Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
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Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
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27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
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IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
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IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
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httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
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Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
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Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
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Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
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Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
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Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
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Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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17
looking at the impact of off-farm participation on agriculture production and welfare we used
Durbin and Wu-Hausman tests to check if the instruments used were valid or not In addition
we used the first stage regression statistics to check if the instruments were relevant in the
estimations see table A
In this section we present findings based on six models that is OLS (1) Tobit (2)
DH (3) GSEM (4) PANEL-UNB-RE (5) and GSEM-FE (6) In terms of consistency on the
models we find large consistency between OLS and error correction models Findings for both
countries reveal that off-farm participation does not have significant impact on agricultural
productivity These results imply that households could probably be using incomes generated
from off-farm employment to smoothen their consumption as opposed to investing in better
technologies to boost agriculture This situation could also arise when there is suppliers labour
force in the rural economy such that re-allocation of labour from on-farm to off-farm does not
affect agricultural production in any way Similar findings are reported for male and female
headed households for both countries (see Tables 7a 7b 8a and 8b) These findings are
consistent with Lewis (1954) and Ranis and Fei (1961) who argued that allocation of on-farm
labor to non-farm labor does not adversely affect agricultural productivity because marginal
productivity of labor tends towards zero in the rural economy
However the findings are inconsistent with several studies (Haggblade et al 2010
Ivanic and Martin 2017 Zereyesus et al 2017) which have suggested that withdrawal of
resources like capital and labour might hinder farm investment in better technologies and
therefore resulting into low on-farm production According to Pfeiffer et al (2009) the adverse
effect can also arise when income from off-farm is used for either consumption or further
investment in off-activities Similarly Harris and Todaro (1970) theory on rural-urban
development postulated that agricultural shadow wage is always positive in rural areas and
therefore any resource re-allocation away from the sector could have adverse effects On the
other hand other studies have argued that off-farm income complements agricultural
productivity (Woldenhanna 2001 Bezu amp Holden 2014 Babatunde 2015 Adjognon et al
2017 Zereyesus et al 2017) where they held that off-farm income increased purchase of farm
inputs investment in high technology and hence improved production
With respect to household factors influencing selection into agricultural productivity
for Tanzania Table 7 indicate that age and formal education of household head have negative
and significant effect on agricultural productivity More educated household members are more
likely to venture into off-farming activities particularly in rural areas where farming is majorly
left to less educated Several studies have found similar results (Lanjouw and Lanjouw (2001)
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
18
De Janvry and Sadoulet (2005) Oseni and Winters 2009) who argue that education play an
important role towards selection into on-farm or off-farm activities The positive coefficient of
age squared indicates that agricultural production increases with age On the other hand we
report positive effect of family labor However the squared term show that labor effect declines
with an increase in family labor
Regarding characteristics of production we report that farm size wages transport
costs costs of inputs good soil farm productive assets seed type and shocks are all significant
and positively related to agricultural production These findings underscore the importance of
soil fertility for sustaining and enhancing agricultural productivity In addition farm productive
assets are instrumental in increasing efficiency in farming and this results in increased
productivity Improved seeds relate to high quality seeds that are suited to the local
environment in the sense that they are pest resistant and drought tolerant Consequently
improved seeds increase farm harvest and thus agricultural productivity On the other hand the
location of a household (rural) was significant and negatively related to agricultural
productivity Since most agricultural activities take place in rural areas increased off-farm
activities are likely to have adverse effects on agricultural production due to re-allocation of
labour and capital from the rural sector On the question of institutional determinants of
agricultural production the study show that remittances are significant and negatively
correlated to agricultural productivity while the coefficient of networking was significant and
positively related on-farm production Furthermore Table 7 indicates that distances from home
to the nearest home has a negative effect on on-farm production while household networks are
positively related to agricultural productivity Finally regarding weatheragroecological zones
the study observed positive production for Central Northern Coastal and Southern regions
For the case of Uganda Table 8 reveals a positive and significant effect of household
size and family labor on agricultural productivity Similar case was reported for Tanzania
More active family members imply more farm labour force and hence increase in on-farm
production in Uganda In addition age of the household head has negative and significant
relationship with agricultural productivity This means that agricultural productivity declines
with age due to diminished abilities of the household head The situation was different for
Tanzania where results indicate that over time age effect becomes positive
As regards determinants of production transport input costs number of farm
productive assets as well as extension services have positive and significant relation with
agricultural production On the other hand findings show that agricultural shocks and land
ownership are negative and are significantly related to agricultural productivity Land tenure
19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
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Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
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Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
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Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
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Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
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19
relating to formal land titles affords land use rights enabling households to enjoy security and
control of agricultural production However this security does not seem to boost agricultural
production in Uganda Households that own land do not make the best out of that land as
opposed to those who hire for farming Contrary to Tanzania good soils have a negative and
significant relation with agricultural productivity Farm productive assets are likely to increase
efficiency and productivity on the farm Extension services on the other hand are key in
delivering scientific knowledge and research to farmers by means of farmerrsquos education
Extension services are therefore imperative for keeping farmers informed with the aim of
improving agricultural productivity However in Tanzania extension services were
insignificant
Distances to the population centre and to the market are both positive and significantly
related to agricultural productivity Similarly findings show that annual precipitation is
statistically significant and positively related to agricultural productivity On agroecological
zones there is negative and significant correlation between agricultural productivity and
Tropical-coolhumid Eastern and Northern Uganda On the other hand Western part of
Uganda is pro- agricultural
63 Off-farm participation and welfare
Findings regarding the impact of off-farm participation on welfare are presented in
Tables 9 and 10 for Tanzania and Uganda respectively Estimation reveal that off-farm
participation has no significant impact on farmerrsquos welfare for both Tanzania and Uganda
however for the case of female and male headed households in Tanzania (see Tables 9a and
9b) and Uganda (see Table 10a and 10b) are quite different In Tanzania the results show that
off-farm participation reduces household welfare among male headed household while for
Uganda off-farm employment reduces welfare for female headed households These findings
are contrary to other studies (Maritime 2001 Lanjouw amp Lanjouw 2001 Matsumoto et al
(2006) which argue that off-farm income has the potential to increase wealth and income in
the rural sector implying that off-farm activities supplement on-farm income or cushion
farmers against losses due to shocks which reduces agricultural production
With respect household welfare characteristics for Tanzania age of the household head
has a negative and significant impact on household welfare Young household heads may have
less experience in managing household resources for improvement in welfare However
20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
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non-farm employment and household welfare evidence from Malawi World Bank
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Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
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Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
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Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
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Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
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Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
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27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
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IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
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IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
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Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
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Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
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Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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20
quadratic relationship indicate household welfare increases with age implying that over time
household members become more experienced in both on-farm and off-farm employment
As regards production characteristics farm size wages input costs good soil and seed
type have positive and significant effects on welfare The size of the farm can have a positive
effect on subsistence farming which increases household consumption Use of improved seeds
is linked to significant increase in yield which increases consumption directly through
household consumption of agricultural produce or indirectly through increased earnings from
sale of farm produce The study has revealed that wages and input costs are positively related
to household welfare Contrary to the expectations the study established a negative and
significant impact of farm productive assets on welfare
According to estimates regarding institutional factors access to credit and extension
services have positive and significant effect on welfare Access to credit reduces liquidity
constraints faced by households and thereby increasing welfare While Distance to the road
was negative and highly significant distance to the market was pro-welfare With respect to
climate annual precipitation had positive and significant impact temperatures have negative
effect of welfare Estimates on agro-economic zones show that household consumption was
higher in Central Northern Coastal and Southern regions of Tanzania On the other hand off-
farm participation reduced welfare in the Tropic-warmsub-humidity Tropic-warmhumidity
Tropic-coohumidity regions Finally there was an improved welfare for the years 2010 and
2012
For Ugandan (see Table 10) size of the household affected welfare negatively
Regarding production determinants type of seeds planted good soil number of farm
productive assets cost of inputs cost of transport and size of the farm are pro-welfare
characteristics Farm size is associated with increased subsistence farming and earnings from
sale of farm produce while farm productive assets are likely to increase efficiency and
productivity for increased consumption On the other hand estimates show that loss of wages
and hired labor have negative and significant effect on welfare The results for hired labor may
occur when costs associated with hiring labour outweigh productivity gains
With respect to institution factors remittances have positive and significant effects on
welfare On agro-ecological zones off-farm participation had negative impact on the welfare
of the Eastern Northern and Western Uganda
21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
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Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
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Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
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Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
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21
64 Estimated results and the common main findings
In the two East African countries (Tanzania and Uganda) we report no significant
effect of off-farm employment on agricultural production Similarly findings indicate that off-
farm participation does not affect in any way the welfare of households for both countries
except in the case of male headed households in Tanzania and Female headed for Uganda
where a negative effect was recorded
Regarding productivity selection findings report that for both countries seed type
input costs cost of transport nutrients and farm productive assets are pro-productivity factors
while on the other hand seed type size of the farm input costs are pro-welfare characteristics
for the two countries
70 Conclusion
Agriculture is the main source of livelihood for majority people in the East African
region There are facts that agricultural productivity in the region is declining This decline
could be attributed to movement of labour capital and other resources outside the rural
economy The nature speed and implications of these movements on household welfare and
policies to tackle income gaps between rural and urban areas will largely rely on both policy
and institutional framework This is a serious issue particularly for East Africa region due
small-scale farming small farm lands use of traditional technologies and high levels of poverty
in the rural economy These provides a huge opportunity for market-oriented transfers to
enhance allocative efficiency and an urgent development of rural areas It was therefore critical
to understand the dynamics behind on-farm and off-activities co-existence for designing
welfare enhancing policies
We used recent panel data for Tanzania and Uganda to investigate the impact of off-
farm participation on agricultural productivity and welfare in East Africa First we find that
off-farm employment has no impact on agricultural productivity for both Tanzania and Uganda
These findings is imply that re-allocation of household labour from on-farm activities to
alternative forms of employment such as wage employment self-employment and other forms
of employment does not affect agriculture in the two countries This may be attributed to
surplus labour or nil agricultural shadow wage especially in the rural economy
Secondly we report that off-participation does not have a significant impact on
household welfare for the two countries in East Africa However it was found that off-farm
employment reduces welfare among male headed households in Tanzania and female headed
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
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52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
22
households in Uganda These findings contradict other studies (Barret et al 2001 Katega and
Lifuliro 2014) where we found that off-farm income improved household welfare
The empirical findings on explanatory variable indicate that improved seeds input and
transport costs soil nutrients and farm productive assets are key pro-productivity factors for
both countries For Tanzania wages family labor farm size good soil and family networks
have a positive impact on agricultural production while for Uganda household size extension
services and distance to the market are pro-productivity factors
With respect to welfare we observe that seed type size of the farm good soil and input
costs are pro-welfare characteristics for both Tanzania and Uganda Welfare is also influenced
positively by extension services precipitation wages seed type credit access distance to the
market soil nutrients and networking for Tanzania while remittances have positive impact
on household welfare in Uganda
23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
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Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
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52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
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World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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World Bank 2011 World Development Indicators The World Bank Washington DC USA
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
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23
Table 01 Variable definitions Variable Variable definition
Outcome variable
Off-farm1 Dummy 1 if household head is engaged in on-farm employment 0 if otherwise
Off-farm2 Dummy 1 if household head is in wage employment 0 if otherwise
Off-farm3 Dummy 1 if household head is self-employed 0 if otherwise
Off-farm4 Dummy 1 if household head is employed in mining or tourism 0 if otherwise
Off-farm Dummy 1 If the household head is engaged in off-farm activities 0 if otherwise
Agricultural productivity Agricultural produce in local currency
Welfare Adult equivalent consumption expenditure in local currency
Household characteristics Gender Dummy 1 if household head is male 0 if female
Age Age of household head in years
Formal education Household head Formal education Household Head
Household size Number of household members
Dependency ratio The ratio of the head of the household divided by household size
Active Labor The number of members between 15 years and 65 years
Location Dummy 1 the households live in the Urban centers 0 if otherwise
Mainland Mummy1 the households live in Tanzania 0 if otherwise
Plot characteristics Tenure Dummy 1 if plot owner has a title 0 if otherwise
Poor soil Dummy 1 if soil is classified as poor
Fair soil Dummy 1 if soil is classified as fair
Good soil Dummy 1 if soil is classified as good
Resources Farm size Land holding in acres
Farm productive assets Number of farm productive agricultural assets
Access to credit Dummy 1 if household has a credit facility 0 if otherwise
Remittance Dummy 1 if household received remittances from localabroad sources
Extension services Dummy 1 if household received extension advice 0 if otherwise
Hired labour Dummy 1 if household hired farm labour 0 if otherwise
Seed Dummy 1 if improved seed 0 if traditional seed
Wages Amount of different activities in local currency Cost of inputs Amount of different inputs such as fertilizers seeds pesticides etc in local currency
Cost of transport Amount of transporting produce from the farm in local currency
Networks Number of networks per households
Shocks Dummy 1 if agricultural or household shocks occurred 0 if otherwise
Loss of Harvest Dummy 1 if household lost the harvest 0 if otherwise
Distances from the farm
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
24
Distance to the road HH Distance in (KMs) to Nearest road
Distance to the market HH Distance in (KMs) to Nearest Market
Distance to the house HH Distance in (KMs) to Nearest House
Distance to population HH Distance in (KMs) to Nearest Population Center with +20000
Climate
Temperature Average annual temperature (degC)
Annual Precipitation Average annual rainfall (mm)
Nutrient availability Dummy 1 constrained 0 if otherwise
Agro ecological Zones Different zones have a code
25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
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Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
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World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
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Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
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25
Table 02 Combined Households Totals for both Tanzania and Uganda
Tanzania Total Farmers of Farmers of Farmers in Off-farm
2008 3265 2429 744 2606
2010 3924 2768 705 2449
2012 5010 3212 641 2245
Total 12199 8409 698 2416
Uganda
2009 2991 2349 785 2946
2010 3025 1712 566 2804
2012 3081 1977 642 2473
Total 9097 6038 664 2751
01
23
4
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in TSH)
female male
Produced with own authors using WB LSMS data
Figure 3aOfffarm according by gender of the HH head in Tanzania
67
89
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
0 600000 1200000 1800000 2400000 3000000
Agriculture Production (in USH)
female male
Produced with own authors using WB LSMS data
Figure 3bOfffarm according by sex of the HH head in Uganda
50
00
010
00
00
15
00
00
20
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4a Male HH welfare according to the production in Tanzania
40
00
050
00
060
00
070
00
0
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 4b Male HH welfare according to the production in Uganda
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
26
0
10
00
00
20
00
00
30
00
00
40
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in TSH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5a Female HH welfare according to the production in Tanzania
40
00
060
00
080
00
010
00
00
12
00
00
Expe
cte
d H
H w
elfa
re
0 400000 800000 1200000 1600000 2000000
Agriculture Production (in USH)
On farm Off farm
Produced with own authors using WB LSMS data
Figure 5b Female HH welfare according to the production-
20
24
Expe
cte
d p
roba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6a Offfarm according to the age the HH head in Tanzania5
115
2
Expe
cte
d p
ro
ba
blity
of b
ein
g in o
fffa
rm
16 30 44 58 72 86
Age of the HH head (in years)
female male
Produced with own authors using WB LSMS data
Figure 6b Offfarm according to the age the HH head in Uganda
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
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Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
27
Table 03 Descriptive statistics ndash Tanzania
Variables N Mean Std Dev Min Max
Outcome variables 0fffarm 8409 02416 0428 0 1
Agricultural productivity 8409 4817506 1204217 000 520e+07
Welfare 8409 7286131 5580214 362338 9660413
Household characteristics Gender 8409 078 042 000 100
Age 8409 4746 1512 1700 101
Formal education Household head 8409 074 044 000 100
Formal education Male household head 8409 026 044 000 100
Formal education Female household head 8409 043 049 000 100
Household size 8409 556 313 100 5500
Active Labour 8409 287 174 000 2500
Dependency Ratio 8409 026 019 002 100
Wages (per month) 8409 5062331 1946606 000 5886000
Plot characteristics Tenure 8409 005 021 000 100
Poor soil 8409 010 030 000 100
Fair soil 8409 072 045 000 100
Good soil 8409 018 038 000 100
Resources
Farm size 8409 594 1511 001 625
Farm productive assets 8409 506 1520 000 520
Access to credit 8409 010 029 000 100
Remittance 8409 008 027 000 100
Extension services 8409 010 030 000 100
Hired labour 8409 017 038 000 100
Seed 8409 032 047 000 100
Wages 8409 5062331 1946606 000 588600000
Cost of inputs 8409 3742947 2162357 000 122e+0700
Cost of transport 8409 121559 1400447 000 59000000
Shocks 8409 080 039 000 100
Loss of harvest 8409 084 036 000 100
Distance from the farm
To nearest road 8409 120 404 000 240965
To nearest market 8409 542 1505 000 10605
Climate
Temperature 8409 22382 3576 10000 27800
Precipitation 8409 105477 37893 000 237700
Nutrients availability 8409 179 099 000 700
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
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Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
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Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
28
Table 04 Descriptive statistics ndash Uganda
Variables N Mean Std Dev Min Max
Outcome variable Off-farm1 1661 064 048 000 100
Off-farm2 1661 026 044 000 100
Off-farm3 1661 009 028 000 100
Off-farm4 1661 0006 008 000 100
Agricultural productivity 6038 1903117 9735139 000 285e+08
Welfare 6038 5359216 5820525 3380598 1757384
Household characteristics Gender 6038 082 038 000 100
Age 6038 4561 1241 1400 10000
Formal education Household head 6038 099 007 000 100
Formal education Male household head 6038 096 018 000 100
Formal education Female household 6038 096 017 000 100
Household size 6038 720 35 100 3300
Dependency Ratio 6038 020 019 000 100
Plot characteristics Tenure 6038 072 045 000 100
Poor soil 6038 003 017 000 100
Fair soil 6038 009 023 000 100
Good soil 6038 081 039 000 100
Resources Farm size 6038 229 1476 000 61044
Farm productive assets 6038 669 649 000 25500
Access to credit 6038 016 030 000 100
Remittance 6038 024 029 000 099
Extension services 6038 021 029 000 096
Seed 6038 027 035 048 102
Wages 6038 5969453 3184039 000 108e+07
Hired labour 6038 091 029 000 100
Cost of inputs 6037 1181525 2574533 000 6245000
Cost of transport 6038 9253428 1734197 000 9869958
Shocks 6038 029 037 045 105
Loss of harvest 6038 011 031 000 100
Distance from the farm
To nearest road 6038 816 733 000 4048
To nearest market 6038 3265 1886 049 11623
Climate
Temperature 6038 21706 2364442 10000 265
Precipitation 6038 122676 18510 68500 2036
Nutrients availability 6038 222 117 000 700
29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
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African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
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Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
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Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
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29
Table05 Factors that influence off-farm participation in Tanzania Simple OLS Probit Tobit
Basic Household characteristics
Gender 0184 0328 0190
Age of the head of the Household 00128 00456 00185
Age Squared -0000198 -0000768 -0000263
Formal education Household Head 0122 00505 0122
Active labor 00171 -0214 00106
Active labor Squared 000125 00206 000173
Mainland -0113 00196 -0112
Marital status -0224 0362 -0219
Production determinants
Farm size (acres) -000338 -00107 -000333
Farm size Squared 00000107 0000224 00000106
Number of farm productive assets (log) -00452 0136 -00442
Title 00737 0185 00769
Transport cost (log) -000760 0000442 -000753
Cost of inputs (log) 000253 000752 000252
Farm labor hire 0114 000150 0115
Yield (log) -00222 00392 -00216
Shock causing incomeasset reduction -000993 00820 -00113
Remittance 00340 00627 00401
Institutional determinants
Access to credit 0208 -0277 0205
Extension services -00297 00362 -00325
Agricultural shocks -00230 00450 -00227
Distance determinants
Distance road (log) 00783 -00394 00785
Distance populated center (log) -00119 00105 -00114
Distance market (log) -00471 00339 -00469
Region
Central -00552 -0164 -00596
Northern 00214 -0395 00153
Coastal 00159 -0135 00126
Southern 000828 -0113 000738
Year 2010 -00336 -0171 -00397
Year 2012 -00292 -0000956 -00319
Constant 1530 1328 1413
Observations 8129 8129 8129
R2 0152
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
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30
Table06 Factors that influence Off-farm participation in Uganda Simple OLS Probit Tobit
Basic Household characteristics
Gender -0397 -1265 -1149
Age Household Head (years) -000247 -0000523 000619
Age Squared 00000583 0000132 00000660
Formal education Household Head -0601 -2447 -1274
Size of the households 00170 00560 00493
Family labor 0000189 0000667 0000586
Family labor squared -551e-08 -0000000192 -0000000184
Marital status -00482 -0181 -0168
Production determinants
Farm size (acres) 0000530 000164 000188
Farm size squared -0000000955 -000000355 -000000418
Yield (log) -000510 -00150 -00130
Sales (log) 000932 00292 00116
Farm labor hire 000323 00103 000847
Wages (log) 00552 0189 0180
Title 00234 00738 00685
Number of farm productive assets (log) 000403 00146 00127
Cost of inputs 0200 0583 0524
Institutional determinants
Access to credit -000883 -00208 000259
Extension services 000102 -000293 -000826
Agricultural shocks -00113 -00472 -00494
Distance determinants
Distance road (log) 000832 00284 00271
Distance populated center (log) -00334 -0111 -0102
Distance market (log) 000210 000854 000452
Region
Eastern region 00727 0239 0215
Northern region 00613 0225 0211
Western region -000679 -00371 -00486
Year 2010 -00203 -00759 -00627
Year 2011 00590 0213 0216
Constant 1064 2139 0881
Observations 5235 5235 5235
R2 0201
Pseudo R2
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
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Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
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31
Table A Instruments tests for both countries Tanzania
Agriculture production Instruments (Hired labour and Distance to the market)
Durbin (score) chi2(1)
678856 (p = 04100) Wu-Hausman
F(18368)
675601 (p =
04111)
First Stage Regression F(28368) 138127 Prob gt F 00000
Agriculture welfare (remittance Transport cost and networks)
Durbin (score) chi2(1)
183385 (p = 01757) Wu-Hausman
F(18368)
18253 (p =
01767)
First Stage Regression F(28368) 804439 Prob gt F 00000
Uganda
Agriculture production Instruments (Age and Title)
Durbin (score) chi2(1)
951781 (p = 03293) Wu-Hausman
F(16002)
946255 (p =
03307)
First Stage Regression F(26002) 276162 Prob gt F 00000
Agriculture welfare (Age and Title)
Durbin (score) chi2(1)
180966 (p = 01785) Wu-Hausman
F(16002)
179911 (p =
01799)
First Stage Regression F(26001) 321328 Prob gt F 00000
32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
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Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
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Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
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Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
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52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
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Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
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Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
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32
Table 07 Agricultural production and the Off-farm activity-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender 00374 00132 0143 00744 -0159 000395
Age Household Head (years) -00328 -00386 -00101 -00511 -00244 -00409
Age Squared 0000303 0000363 00000698 0000498 0000128 0000388
Formal education Household Head -0248 -0295 00783 -0150 -0482 -00383
Active labour 0163 0181 00929 0227 0103 0156
Active labour Squared -00118 -00134 -000378 -00146 -000930 -000879
Production determinants
Location -1283 -1500 -0170 -1431 -1630 -1798
Mainland -0188 -0304 -00639 -0308 -1184 -2598
Farm size (acres) 00216 00212 00259 00149 00444 00466
Farm size Squared -0000037 -0000036 -0000047 -0000021 -0000080 -0000084
Wages (log) 0129 0143 00385 0145 0120 0106
Cost of inputs (log) 0115 0132 000797 0131 0138 00970
Transport cost (log) 00860 00851 00720 00837 0106 0103
Fair soil -0171 -0251 0316 -0272 00362 0206
Good soil 0701 0734 0474 0705 0981 1151
Seed type 0756 0876 00987 0877 0997 0593
Number of farm productive assets (log) 0610 0631 0403 0573 0539 0481
Shock causing incomeasset reduction 0418 0543 -00732 0492 1063 0379
Institutional determinants
Access to credit -00719 -00973 00899 0180 -0631 -0621
Extension services -0135 -0149 00802 -0168 00272 0120
Network 0348 0381 0119 0340 0419 0348
Remittances (local or abroad) -0577 -0648 -0137 -0604 -0371 -0145
Distance determinants
Distance home (log) -0229 -0256 00152 -0204 -0215 -0177
Distance road (log) 00657 00711 00110 00567 0172 0111
Climate determinants
Temperature (log) 0141 0103 0432 0115 00151 -0514
Nutrient availability 0410 0482 -00303 0415 0411 0398
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
33
Annual Precipitation (log) -000876 00412 -0282 00278 0116 0720
Agroecological Zones Tropic-warmsub-humidity -0103 -0153 00730 -0128 -0305 -1294
Tropic-warmhumidity 0274 0319 -0363 0323 0303 0413
Tropic-coolsemi-arid 00971 00550 0290 00617 -00445 0140
Tropic-coolsub-humidity -00853 -0125 00779 -0110 -00436 -0907
Tropic-coolhumidity -00666 -00963 -0232 -00364 00251 -0263
Central Region 2152 2526 0223 2252 2975 3575
Northern Region 1558 1842 0253 1662 2248 2447
Coastal Region 1404 1675 0122 1482 2259 2631
Southern Region 2657 3034 0520 2789 3353 3181
Year 2010 -0256 -0264 -00668 -0319
Year 2012 0128 0127 00990 00695
Off-farm participation -1525 -1758 -0291 -3186 -0509 -00489
Constant 5982 5343 1021 6192 6010 6412
Observations 8368 8368 8409 8368 7113 6311
R2 0329
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
Table07a HH Agriculture Production and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 00545 00673 -00268 00706 00610 00234
Age Squared -0000320 -0000401 0000231 -0000435 -0000195 -00000961
Formal education Household Head 0154 0169 00742 0160 -0805 -00611
Active Labour 0360 0393 0151 0385 0136 -0297
Active labour Squared -00496 -00551 -000612 -00547 -00396 0125
Production determinants
Location -0606 -0698 -00635 -0703 -2077 -2231
Mainland 0209 0317 -0149 0336 0809 2551
Farm size (acres) 00146 000984 00435 00104 00537 00234
Farm size Squared -00000252 -000000405 -0000156 -000000661 -0000369 000266
Wages (log) 0118 0132 00263 0132 00666 0125
Cost of inputs (log) 0128 0148 -000174 0148 00936 00224
Transport cost (log) 0128 0134 00712 0134 0179 0106
Fair soil -0387 -0515 0326 -0515 -0248 0112
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
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Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
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Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
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Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
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Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
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Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
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Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
34
Good soil 0269 0230 0512 0231 0899 0323
Seed type 0746 0894 -00372 0894 0341 0115
Number of farm productive assets (log) 0577 0613 0347 0619 1123 00177
Shock causing incomeasset reduction -0525 -0603 00523 -0604 0342 -00478
Institutional determinants
Access to credit -00982 -00729 -0196 -0113 -1831 0298
Extension services -0735 -0865 0315 -0872 -0896 -1405
Network 0339 0372 0137 0376 0516 0342
Remittances (local or abroad) -0721 -0844 -00862 -0836 -0787 -0102
Distance determinants
Distance home (log) -0385 -0451 00448 -0461 -0529 00587
Distance road (log) 00745 00861 00168 00891 00768 -0205
Climate determinants
Temperature (log) 0438 0448 0320 0446 -0331 -0598
Nutrient availability 0442 0524 -00501 0530 0697 0657
Annual Precipitation (log) -0447 -0470 -0228 -0468 0189 0637
Agroecological Zones Tropic-warmsub-humidity 0702 0784 0235 0780 -00891 -0687
Tropic-warmhumidity 1419 1644 -0272 1647 1551 0235
Tropic-coolsemi-arid 0472 0506 0303 0502 000207 -1343
Tropic-coolsub-humidity 0789 0852 0291 0850 -00341 -0489
Tropic-coolhumidity 0664 0673 0235 0673 0392 00384
Central Region 1557 1751 0249 1746 1219 3610
Northern Region 0963 1058 0348 1044 -0107 1332
Coastal Region 0766 0809 0196 0803 -0197 2692
Southern Region 2094 2300 0647 2299 1574 3294
Year 2010 -1381 -1662 0220 -1673
Year 2012 -0497 -0618 0186 -0624
Off-farm participation -1514 -1776 -0246 -1588 4535 -0326
Constant 5123 4236 1044 4125 -1508 1798
Observations 1939 1939 1969 1939 1631 905
R2 0254
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
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World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
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Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
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35
Table 07b Agricultural production and the Off-farm activity-Male Headed Households-Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00496 -00591 -000462 -00713 -00388 -00440
Age Squared 0000403 0000492 00000136 0000626 00000757 0000447
Formal education Household Head -0352 -0411 00884 -0163 -0484 -00773
Active Labour 0158 0178 00707 0235 0158 0169
Active labour Squared -00101 -00116 -000277 -00127 -000777 -00101
Production determinants
Location -1507 -1768 -0203 -1667 -1321 -2443
Mainland -0116 -0255 -00623 -0252 -2554 -3093
Farm size (acres) 00243 00247 00257 00154 00445 00511
Farm size Squared -
00000419
-
00000427
-
00000458
-00000215 -00000752 -
00000924
Wages (log) 0131 0144 00409 0146 0142 0110
Cost of inputs (log) 0110 0125 000996 0124 0156 0110
Transport cost (log) 00745 00722 00714 00690 00797 00994
Fair soil -00450 -0104 0316 -0132 00439 0359
Good soil 0867 0923 0465 0885 0875 1337
Seed type 0763 0874 0129 0878 1231 0706
Number of farm productive assets (log) 0652 0672 0409 0576 0291 0627
Shock causing incomeasset reduction 0644 0817 -00996 0726 1341 0381
Institutional determinants
Access to credit -00884 -0128 0160 0251 -0180 -0587
Extension services 000668 00163 00301 -00262 0139 0204
Network 0341 0373 0114 0312 0355 0357
Remittances (local or abroad) -0425 -0468 -0126 -0322 -0272 -00167
Distance determinants
Distance home (log) -0186 -0201 000934 -0136 -00275 -0208
Distance road (log) 00624 00664 000720 00510 0132 0205
Climate determinants
Temperature (log) 00752 00239 0487 00459 00249 0167
Nutrient availability 0389 0457 -00259 0354 0261 0377
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
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Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
36
Annual Precipitation (log) 0120 0194 -0318 0176 0226 0277
Agroecological Zones Tropic-warmsub-humidity -0436 -0536 00356 -0513 -0585 -1768
Tropic-warmhumidity -0234 -0275 -0340 -0276 -00320 0296
Tropic-coolsemi-arid -0124 -0202 0294 -0206 -0318 0604
Tropic-coolsub-humidity -0454 -0537 00290 -0524 -0157 -1305
Tropic-coolhumidity -0477 -0556 -0334 -0460 00637 -0706
Central Region 2094 2472 0232 2028 3734 2922
Northern Region 1523 1823 0237 1516 3209 2579
Coastal Region 1365 1661 0112 1367 3379 2717
Southern Region 2599 2982 0496 2602 4115 3075
Year 2010 000829 00698 -0137 -00608
Year 2012 0284 0313 00696 0198
Off-farm participation -1447 -1660 -0302 -3648 -2234 00108
Constant 5985 5338 1031 6573 8743 6295
Observations 6429 6429 6449 6429 5482 4349
R2 0358
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08 Agriculture production and Off-farm activity in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
IV PANEL-
UNB-FE
GSEM-FE
Basic Household characteristics
Gender -00543 -00618 0110 -0346 -0157 0118
Formal education Household Head -0914 -0931 -0408 -1476 -0741 -0364
Household size 00316 00298 00379 00497 00372 00347
Family Labour 000621 000640 000293 000639 000712 000348
Family Labour Squared -00000029 -00000030 -00000012 -00000030 -00000031 -00000015
Productive determinants
Farm size (acres) 000415 000458 0000739 000442 000931 -000347
Farm size (Squared) -000000822 -000000889 -0000000884 -000000864 -00000140 000000375
Farm labour hire 00560 00437 0132 00550 0281 000402
Wages (log) 00124 00130 000116 00157 000881 -0000286
Transport cost (log) 00821 00836 00623 00831 00886 00533
Cost of inputs (log) 00587 00605 00454 00598 00729 00333
Good soil -0391 -0397 -0226 -0389 -0262 -0199
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
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Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
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Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
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Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
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52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
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Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
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Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
37
Seed type 00197 00160 00324 00174 -0125 -00210
Number of farm productive assets (log) 0200 0206 0159 0236 0278 0190
Agricultural shocks -0194 -0195 -0125 -0208 -0296 -0154
Institutional determinants
Credit -000692 000180 -00513 -000497 -00697 -00691
Remittances (local or abroad) -0402 -0429 -00291 -0237 -0115 0000434
Extension services 0430 0446 0340 0449 0394 0326
Distance determinants
Distance road (log) -000717 -00109 00375 -00112 00287 00366
Distance populated center (log) 0127 0135 0155 0105 0202 0156
Distance market (log) 0289 0325 -0115 0339 0101 -00392
Climate determinants
Temperature (log) -2471 -2450 -2616 -2437 -3053 -3390
Nutrient availability 1078 1181 -00309 1195 1417 -00627
Annual Precipitation (log) 5020 5517 -00544 5421 4763 -0268
Agroecological Zones
Tropic-warmhumidity 0270 0297 -0212 0250 -00352 -0291
Tropic-coolsub-humidity -1195 -1279 -0431 -1320 -1784 -0603
Tropic-coolhumidity -0183 -0176 -0432 -0220 -0185 -0545
Other 3573 3953 -2783 3892 3156 -5001
Eastern region -0398 -0456 0317 -0391 -0152 00353
Northern region -1289 -1401 -0204 -1359 -0849 -0273
Western region 1085 1158 0196 1147 1324 0190
Year 2010 0951 0972 0730 0959
Year 2011 0490 0491 0869 0542
Off-farm participation -0132 -0138 -00207 -1027 -0983 0111
Constant -1340 -1728 2569 -1583 -8443 3149
Observations 5235 5235 6038 5235 6038 3788
R2 0366 0170
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is significant at the both plt005 and plt0010
Table 08a Agriculture production and Off-farm activity Female Households in Uganda
Simple OLS Tobit (Left Cens
(0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
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African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
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trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
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Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
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Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
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Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
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Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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38
Basic Household characteristics
Formal education Household Head 2192 2356 0538 1466 1469 0
Household size 00405 00377 00472 00469 00419 00595
Family labor 000553 000574 000267 000613 000591 000682
Family labor Squared -0000003 -000000313 -000000112 -000000331 -000000315 -0000005
Production determinants
Farm size (acres) -000950 -000974 -000558 000252 000152 00339
Farm size squared 00000159 00000163 000000966 -000000992 -000000736 -00000686
Farm labor hire 0442 0470 0170 0322 0315 -0518
Wages (log) 00365 00396 -000143 00225 00188 -000601
Transport cost (log) 00553 00560 00538 00758 00729 000353
Cost of inputs (log) 00789 00837 00314 00838 00813 00274
Good soil -0608 -0621 -0388 -0541 -0510 -0523
Seed type -0198 -0215 -00790 -0197 -0170 -0106
Number of farm productive assets 0503 0531 0301 0439 0405 0188
Agricultural shocks -0117 -0111 -0153 -0116 -0121 -00745
Institutional determinants
Access to credit 0235 0264 00281 0308 0263 -00243
Remittances (local or abroad) 00926 00830 00926 0228 0184 -00285
Extension services 0224 0249 0129 0186 0164 -0226
Distance determinants
Distance road (log) 000121 -000864 00695 00109 00216 0276
Distance populated center (log) 0295 0338 0211 0409 0331 00291
Distance market (log) 0293 0326 -000172 0352 0311 00738
Climate determinants
Temperature (log) -3066 -2885 -3491 0434 -0399 -8859
Nutrient availability 1608 1797 00529 2007 1750 -000594
Annual Precipitation (log) 7296 8139 0517 8183 7030 -0341
Agroecological Zones
Tropic-warmhumidity 0360 0440 0208 1468 1256 -1393
Tropic-coolsub-humidity -0638 -0714 0350 -0783 -0659 0112
Tropic-coolhumidity 0104 0175 0132 1562 1317 -1478
Other 5343 6008 1406 6418 5463 0
Eastern region -0929 -1049 0105 -0930 -0732 0191
Northern region -1850 -2065 -0215 -2071 -1762 00481
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
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Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
39
Western region 0710 0817 -000132 2122 1837 -2390
Year 2010 1128 1170 0768 1221
Year 2011 0785 0811 0941 0574
Off-farm participation 00172 00157 00391 -0583 -0306 00579
Constant -3130 -3896 2426 -5771 -4383 6243
Observations 1076 1076 1082 1082 1082 303
R2 0514 0239
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010 levels
Table 08b Agriculture production and Off-farm activity-Male Headed Households in Uganda
Simple OLS Tobit (Left
Cens (0))
DH (Left Cens
(0))
GSEM Full
model
PANEL-UNB-
FE
GSEM-FE
Basic Household characteristics
Formal education Household Head -1227 -1248 -0485 -1598 -0863 -0379
Household size 00306 00291 00369 00401 00301 00322
Family labor 000646 000665 000298 000665 000731 000330
Family labor Squared -0000003 -0000003 -0000001 -0000003 -0000003 -0000002
Productive determinants
Farm size (acres) 000677 000724 000225 000736 00123 -000112
Farm size Squared -00000122 -00000130 -000000297 -00000131 -00000176 650e-08
Farm labor hire -00339 -00521 0115 -00512 0239 00692
Wages (log) 000628 000636 000181 000694 000664 000322
Transport cost (log) 00820 00833 00617 00829 00905 00541
Cost of inputs (log) 00520 00531 00486 00527 00682 00352
Good soil -0358 -0363 -0207 -0358 -0260 -0134
Seed type 00847 00845 00489 00848 -0100 000710
Number of farm productive assets (log) 00987 00989 0120 0122 0211 0132
Agricultural shocks -0229 -0233 -0115 -0243 -0298 -0171
Institutional determinants
Credit -00731 -00724 -00510 -00782 -0151 -0812
Remittances (local or abroad) -0607 -0642 -00780 -0505 -0291 -00768
Extension services 0475 0490 0381 0494 0459 0362
Distance determinants
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
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Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
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Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
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Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
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Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
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Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
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Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
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De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
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Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
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IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
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Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
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Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
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Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
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Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
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Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
40
Distance road (log) 00000438 -000152 00338 -000200 00395 000556
Distance populated center (log) 00730 00724 0141 00582 0183 0181
Distance market (log) 0265 0298 -0130 0308 00460 -00352
Climate determinants
Temperature (log) -2329 -2324 -2489 -2224 -3203 -2871
Nutrient availability 0932 1015 -00393 1020 1267 -00733
Annual Precipitation (log) 4291 4683 -0168 4668 4097 -0426
Agroecological Zones Tropic
warmhumidity
0327 0353 -0231 0324 -0137 -0168
Tropic-coolsub-humidity -1114 -1179 -0506 -1185 -1763 -0669
Tropic-coolhumidity -0159 -0153 -0478 -0169 -0331 -0400
Other 3036 3335 -3605 3338 2621 -5309
Eastern region -0221 -0261 0381 -0230 -00243 0211
Northern region -1062 -1144 -0172 -1129 -0664 -0116
Western region 1135 1199 0232 1190 1230 0451
Year 2010 0875 0888 0733 0876
Year 2011 0369 0359 0878 0392
Off-farm participation -0157 -0165 -00304 -0713 -0768 0128
Constant -8234 -1122 2614 -1131 -2426 2932
Observations 4159 4159 4956 4159 4956 2815
R2 0333 0177
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test significant at the plto005 and plt0010
41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
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Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
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Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
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Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
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52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
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Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
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Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
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Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
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Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
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41
Table 09 HH Welfare and the Off-farm activity Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Gender -00656 -00676 00106 -00415 -00900 -0101
Age Household Head (years) -00372 -00383 -000146 -00436 -00516 -00631
Age Squared 000035 000036 0000005 000042 000045 000056
Formal education Household Head 00723 00710 0129 0135 00653 -00190
Active Labor -000622 -000319 -0124 00161 -00139 00336
Active Labour Squared 00000984 -00000935 000683 -0000477 000312 -0000216
Production determinants
Location -00791 -00876 0266 -00576 -00630 -0142
Mainland -3391 -3463 -0306 -3457 -5424 -4980
Farm size (acres) 00147 00150 000389 00122 00168 00193
Farm size Squared -0000025 -0000026
-00000048 -0000019 -0000030 -0000032
Wages (log) 00389 00394 00167 00375 00443 00369
Cost of inputs (log) 000982 000995 000356 000662 00235 000644
Fair soil -00802 -00830 00152 -00834 -00703 00279
Good soil 00918 00932 00227 00868 0143 0209
Seed type 00566 00576 00421 00483 0414 0283
Number of farm productive assets (log) -0249 -0257 00223 -0287 -0379 -0283
Farm labour hire 000683 000484 00777 00447 00199 00530
Shock causing incomeasset reduction 1028 1056 -00545 1043 0578 0354
Institutional determinants
Access to credit 0505 0511 0284 0632 0704 0479
Extension services 0251 0254 0120 0231 0134 0152
Distance determinants
Distance home (log) 0131 0134 00169 0161 0162 0149
Distance road (log) -00550 -00558 -00254 -00569 -00578 -00349
Distance market (log) 00778 00801 -000114 00543 0145 00788
Climate determinants
Temperature (log) -0570 -0578 -0198 -0570 -0550 -0501
Nutrient availability 00922 00957 -00524 00685 0100 0261
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
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Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
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Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
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Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
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Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
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Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
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Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
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Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
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52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
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Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
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Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
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Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
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World Bank 2011 World Development Indicators The World Bank Washington DC USA
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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
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Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
42
Annual Precipitation (log) 0469 0476 0163 0466 0473 0498
Agroecological Zones Tropic-warmsub-
humidity
-00851 -00882 00325 -00807 -0177 -0437
Tropic-warmhumidity -0283 -0292 0147 -0295 -0224 -0282
Tropic-coolsemi-arid -0199 -0203 -00306 -0199 -0271 -0911
Tropic-coolsub-humidity 00756 00773 00207 00807 0280 -0171
Tropic-coolhumidity -0216 -0228 0275 -0209 -00802 -0207
Central Region 3259 3328 0318 3201 5104 4623
Northern Region 3220 3289 0319 3199 5099 4533
Coastal region 3452 3522 0444 3422 5516 5504
Southern Region 3024 3088 0265 2967 4816 4383
Year 2010 1042 1073 -0127 1081
Year 2012 0173 0180 -00708 0183
Off-farm participation -0177 -0190 0303 -0820 -0303 -00384
Constant 1066 1065 1097 1101 1195 1153
Observations 8368 8368 8368 8368 7113 6311
R2 0412
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010
Table 09a HH Welfare and the Off-farm activity-Female Headed Households in Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) 000375 000377 -0000636 000726 -00145 -000415
Age Squared -00000302 -00000304 000000315 -00000654 0000109 -000000516
Formal education Household Head 0200 0201 0140 0192 0162 0210
Active Labor -0126 -0126 -0213 -0134 -0195 -0186
Active Labour Squared 00114 00113 00206 00117 00223 00171
Production determinants
Location 0184 0184 0195 0180 0308 0352
Mainland -1704 -1713 -0424 -1691 -3146 -0932
Farm size (acres) 000287 000285 000266 000355 0000324 000236
Farm size Squared 000000449 000000457 000000352 000000149 -000000510 0000262
Wages (log) 00128 00128 00184 00129 00237 00109
Cost of inputs (log) -0000554 -0000564 -0000479 0000559 -000513 -000610
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
43
Fair soil 00567 00565 00583 00564 0181 -00295
Good soil 00977 00978 00725 00982 0196 -00455
Seed type 00231 00233 00524 00251 -00708 -00562
Number of farm productive assets (log) 00198 00197 00294 00265 -000108 -00310
Farm labour hire 00606 00603 00732 00462 -00947 000835
Shock causing incomeasset reduction -00921 -00927 -00402 -00943 -00237 -00169
Institutional determinants
Access to credit 0240 0240 0306 0197 0333 0156
Extension services 0289 0289 0263 0282 0243 0215
Distance determinants
Distance home (log) 00602 00603 00328 00496 00694 000660
Distance road (log) -00293 -00293 -00351 -00272 -00388 -00559
Distance market (log) 00458 00462 000967 00483 00642 000567
Climate determinants
Temperature (log) -0147 -0146 -0143 -0150 -00105 -0142
Nutrient availability -00199 -00199 -00326 -00146 -00792 -00280
Annual Precipitation (log) 00789 00787 00972 00821 -00447 00355
Agroecological Zones Tropic-warmsub-humidity 0232 0232 0199 0230 0313 0462
Tropic-warmhumidity 0283 0283 0303 0289 0400 0393
Tropic-coolsemi-arid 00676 00677 00400 00632 00694 -00215
Tropic-coolsub-humidity 0246 0246 0182 0245 0372 0463
Tropic-coolhumidity 0572 0573 0476 0574 0805 1127
Central Region 1732 1741 0462 1737 3122 00382
Northern Region 1667 1676 0430 1662 3046 0373
Coastal region 1854 1863 0557 1859 3239 0539
Southern Region 1726 1734 0434 1734 3082 0586
Year 2010 -0191 -0191 -0134 -0208
Year 2012 -0121 -0122 -00458 -0129
Off-farm participation 0246 0246 0209 0447 -00555 -00113
Constant 1081 1081 1094 1069 1152 1190
Observations 1939 1939 1939 1939 1631 905
R2 0210
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
44
Table 09b HH Welfare and the Off-farm activity-Male Headed Households -Tanzania
Simple OLS Tobit (Left
Cens (0))
DH (Left
Cens (0))
GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Age Household Head (years) -00434 -00449 -000171 -00496 -00572 -00618
Age Squared 0000410 0000424 000000434 0000479 0000503 0000569
Formal education Household Head 00330 00305 0133 0127 00284 -00935
Active Labor 000936 00133 -0115 00342 00119 00319
Active Labour Squared -0000923 -000116 000603 -000139 000170 -000150
Production determinants
Location -0121 -0134 0292 -00952 -0130 -0212
Mainland -3541 -3634 -0284 -3622 -5621 -5327
Farm size (acres) 00161 00165 000403 00130 00179 00230
Farm size Squared -0000027 -0000028 -00000051 -0000020 -0000032 -0000037
Wages (log) 00449 00458 00160 00428 00489 00365
Cost of inputs (log) 00108 00110 000465 000732 00273 00150
Fair soil -0145 -0150 -000310 -0150 -0151 -00207
Good soil 00337 00340 000319 00271 00877 0215
Seed type 00575 00587 00403 00462 0475 0300
Number of farm productive assets (log) -0303 -0314 00220 -0356 -0446 -0333
Farm labour hire -0000193 -000262 00780 00438 00405 0119
Shock causing incomeasset reduction 1245 1286 -00567 1261 0670 0333
Institutional determinants
Access to credit 0552 0561 0277 0703 0768 0453
Extension services 0225 0229 00964 0192 00967 0107
Distance determinants
Distance home (log) 0139 0143 00119 0174 0177 0133
Distance road (log) -00565 -00577 -00219 -00566 -00658 -00405
Distance market (log) 00780 00809 -000315 00436 0157 00689
Climate determinants
Temperature (log) -0699 -0713 -0215 -0698 -0752 -0490
Nutrient availability 0123 0129 -00558 00926 0148 0300
Annual Precipitation (log) 0584 0596 0185 0580 0653 0500
Agroecological Zones Tropic-warmsub- -0216 -0222 -00389 -0214 -0366 -0512
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
45
humidity
Tropic-warmhumidity -0407 -0422 00830 -0419 -0418 -0525
Tropic-coolsemi-arid -0320 -0328 -00607 -0327 -0391 -0856
Tropic-coolsub-humidity -00263 -00255 -00454 -00219 0169 -0200
Tropic-coolhumidity -0484 -0505 0188 -0471 -0428 -0112
Central Region 3394 3482 0290 3308 5266 4870
Northern Region 3355 3443 0299 3314 5279 4900
Coastal region 3597 3688 0424 3557 5750 5818
Southern Region 3110 3191 0227 3033 4911 4544
Year 2010 1289 1334 -0119 1327
Year 2012 0241 0252 -00734 0251
Off-farm participation -0231 -0248 0323 -1008 -0341 -00718
Constant 1061 1060 1100 1106 1199 1154
Observations 6429 6429 6429 6429 5482 4349
R2 0461
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is not significant at the plt005 and plt0010
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
46
Table 10 HH Welfare and Off-farm activity in Uganda
Simple
OLS
GSEM
Full model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Gender 00164 000404 00621 00131
Formal education Household Head 0239 0240 0177 0350
Household size -00223 -00180 -00211 -00178
Family labor 0000115 0000129 00000460 000025
Family labor Squared 202e-08 924e-09 327e-08 -446e-08
Marital status -000329 -000347 -00318 000349
Productive determinants
Farm size (acres) 000737 000702 000480 000813
Farm size Squared -
000001
-
000001
-
000000636
-
00000115
Wage (log) -0008 -0008 -000678 -000578
Transport cost (log) 00138 00138 00131 000870
Cost of inputs (log) 00226 00225 00271 00241
Farm labor hire -0197 -0195 -0182 -0199
Good soil 0126 0130 0133 00787
Seed type 00656 00682 00257 00740
Number of farm productive assets (log) 0177 0185 0219 0200
Agricultural shocks 00199 00235 -00220 00312
Institutional determinants
Access to credit 00241 00243 000402 00367
Remittances (local or abroad) 00944 00923 00239 00897
Extension services 00273 00247 -00108 00588
Distance determinants
Distance road (log) -00516 -00509 -00577 -00308
Distance populated center (log) -00490 -00512 -00851 -00560
Distance market (log) -000817 -000799 -000206 -00407
Climate determinants
Temperature (log) 0587 0559 -0304 0502
Nutrient availability 00310 00308 0110 0000431
Annual Precipitation (log) 0164 0157 -00196 000609
Agroeconomic zone
Tropic-warmhumidity 0189 0175 00847 0115
- Tropic-coolsub-humidity 0102 00928 -00440 00842
- Tropic-coolhumidity 0162 0145 00326 00931
- Other 1582 1502 00506 0504
Eastern region -0412 -0408 -0385 -0390
Northern region -0466 -0466 -0336 -0423
Western region -0192 -0192 -0242 -0212
Year 2010 -0202 -0203
Year 2011 0125 00865
Off-farm participation -00387 00706 0169 -000719
Constant 6364 6167 1229 7555
Observations 5235 5235 6038 3788
R2 0234 0230
Pseudo R2
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
47
Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at
plt0010
Table 10a HH Welfare and Off-farm activity-Female headed households in Uganda
Simple OLS GSEM Full
model
IVPANEL-
UNB-RE
GSEM-FE
Basic Household characteristics
Formal education Household Head -0241 -0603 0201 0
Household size -00275 -000160 -00654 00166
Family labour 0000379 0000351 -0000227 0000734
Family labour Squared 558e-08 -957e-10 0000000368 -000000057
Marital status -00351 -00373 00306 -000428
Productive determinants
Farm size (acres) 000439 000682 00110 000291
Farm size Squared -00000082 -00000126 -00000235 -000000401
Wage (log) -000490 -000353 -00127 -000808
Transport cost (log) 00177 00192 00172 00319
Cost of inputs (log) 00311 00275 00114 000901
Farm labor hire -0239 -0195 -0469 -0275
Good soil 0126 0172 00678 00615
Seed type 0143 0100 00265 00787
Number of farm productive assets (log) 0115 0136 0187 -00329
Agricultural shocks 00137 00219 00247 00330
Institutional determinants
Access to credit 0122 0125 0134 0103
Remittances (local or abroad) 0137 0265 00112 0226
Extension services 00827 000565 00932 -0000845
Distance determinants
Distance road (log) -00145 -00204 -00135 00175
Distance populated center (log) -000563 -00407 00134 -0115
Distance market (log) -00411 00164 -00391 -000724
Climate determinants
Temperature (log) 0366 -0463 1170 00350
Nutrient availability -000583 -00137 -00141 -0405
Annual Precipitation (log) 0297 -00221 0352 -0129
Agroeconomic zones
Tropic-warmhumidity 0418 0262 0566 0670
Tropic-coolsub-humidity 0336 00203 0411 0296
Tropic-coolhumidity 0320 0102 0519 0570
Other 2527 -0329 3714 0
Eastern region -0405 -0247 -0555 -0296
Northern region -0428 -0325 -0580 -0291
Western region -00813 -00511 -00448 0399
Year 2010 -0203 -0205
Year 2011 -000964 -0181
Off-farm participation -0174 -0851 1241 -0120
Constant 6715 1397 0988 1125
Observations 1076 1082 1082 303
R2 0280 0376
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
48
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausman test is not significant at the plt005 and plt0010
Table 10b HH Welfare and Off-farm activity-Male headed households in Uganda
Simple OLS GSEM Full
model
PANEL-UNB-
RE
GSEM-FE
Basic Household characteristics
Formal education Household Head 0323 0357 0180 0253
Household size -00201 -00209 -00159 -00151
Family labor 00000298 00000507 -000000431 0000220
Family labor Squared 196e-08 939e-09 359e-08 -457e-08
Marital status 000980 00138 -00361 00111
Productive determinants
Farm size (acres) 000710 000794 000533 000967
Farm size Squared -
00000102
-
00000115
-
000000694
-
00000133
Wage (log) -000744 -000743 -000585 -000500
Transport cost (log) 00133 00136 00121 000794
Cost of inputs (log) 00208 00209 00284 00232
Farm labor hire -0190 -0180 -0150 -0130
Good soil 0118 0117 0105 00716
Seed type 00583 00546 00226 00659
Number of farm productive assets (log) 0188 0187 0236 0223
Agricultural shocks 00305 00310 -00140 00246
Institutional determinants
Access to credit -000123 -000216 -00283 -00125
Remittances (local or abroad) 00787 00677 00137 00892
Extension services 00169 00193 -00146 00594
Distance determinants
Distance road (log) -00631 -00617 -00630 -00385
Distance populated center (log) -00561 -00546 -00888 -00686
Distance market (log) -000505 -000614 -000255 -00429
Climate determinants
Temperature (log) 0608 0614 -0232 0501
Nutrient availability 00323 00370 0123 00315
Annual Precipitation (log) 00683 00962 -00629 -0161
Agroeconomic zones
Tropic-warmhumidity 0162 0160 00580 00597
- Tropic-coolsub-humidity 00730 00703 -00552 -00232
- Tropic-coolhumidity 0149 0152 00190 00344
- Other 0875 1068 -0239 -0845
Eastern region -0471 -0435 -0397 -0408
Northern region -0525 -0493 -0353 -0459
Western region -0230 -0225 -0268 -0248
Year 2010 -0201 -0201
Year 2011 0151 0142
Off-farm participation 000343 00377 00689 00449
Constant 6677 6314 1229 8864
Observations 4159 4159 4956 2815
R2 0240 0260
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
49
Pseudo R2 Source Produced by the authors using the LSMS World Bank Data plt010 plt005 plt0010 The Hausmann test is significant at plt0010
70 References
Adjognon G S Liverpool-Tasie L S O Benfica R M and de la Fuente A (2017) Rural
non-farm employment and household welfare evidence from Malawi World Bank
Policy Research Working Paper No 8096 66
African Union (AU) (2014) Decisions Declarations and Resolution of the Assembly of the
Union Twenty-Third Ordinary Session Available at httpwwwauintencontent
malabo-26-27-june-2014-decisions-declarations-and-resolution-assembly-union-
twenty-third-ord
Ali M and Peerlings J (2011) Value added of cluster membership for micro enterprises of
the handloom sector in Ethiopia World Develop 39 (3) 363ndash374
Angrist J D and Pischke JS (2008) Mostly Harmless Econometrics An Empiricists
Companion the London School of Economics
Barrett C B Reardon T and Webb P (2001) Nonfarm income diversification and household
livelihood strategies in rural Africa concepts dynamics and policy implications Food
policy 26(4) 315-331
Benin S Kennedy A Lambert M and McBride L (2010) Monitoring African agricultural
development processes and performance A comparative analysis ReSAKSS annual
trends and outlook report
Bezu S and Holden S (2014) Are rural youth in Ethiopia abandoning agriculture World
Development 64 259-272
Carter M Waters E Branch Ito L and Ford C (1989) Rethinking Rural Finance
(University of Wisconsin-Madison)
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
50
Davis B Winters P Reardon T and Stamoulis K (2017) Rural nonfarm employment and
farming household‐level linkages Agricultural Economics 40(2) 119-123
De Janvry A Sadoulet E and Zhu N (2005) The role of non-farm incomes in reducing rural
poverty and inequality in China Department of Agricultural amp Resource Economics
UCB
Dillon B Barrett Christopher B (2017) Ten striking facts about agricultural input use in Sub-
Saharan Africa Food Policy 67 (2017) 12-25
Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on
Agricultural Productivity in Rural Ghana Developing Country Studies 3 (9) 79-90
Haggblade S Hazell P and Reardon T (2007) Transforming the rural nonfarm economy
Opportunities and threats in the developing world Baltimore Johns Hopkins University
Press
Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for
growth and poverty reduction World Development 38(10)1429-1441
Haggblade S Smale M Theriault V and Assima A (2017) Causes and consequences of
increasing herbicide use in Mali The European Journal of Development Research 1-
27
Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking
Policy Research Working Paper 6373
IFAD (International Fund for Agricultural Development) (2016) Rural Development Report
2016 Retrieved from httpswwwifadorgruraldevelopmentreport
IMF (2010) Ugandarsquos Poverty Reduction Strategy Paper IMF Country Report No 10141
Karugia J M Guthiga S and Macharia PE (2013) Agricultural Productivity in EAC Region
(1965-2010) Trends and Determinants International Symposium and Exhibition on the
Agricultural Development in the EAC Partner States at the 50 Years of Independence
4th to 8th November 2013 Kampala Uganda Retrieved from
httpwwwkilimotrustorgdocumentsFinal Papers - PDFs8 Dr Karugia and Dr
Guthiga - Agricultural productivity in EAC Regionpdf
Kassa B Kassa B and Aregawi K (2017) Off-farm participation decision and its impact on
crop yield in Northern Ethiopia Journal of Development and Agricultural Economics 9
(2) 16-25
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
51
Lanjouw J O and Lanjouw P (2001) The rural non-farm sector issues and evidence from
developing countriesrdquo Agriculture Economics 26(1) 1-23
Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms
2005ndash2013 Agricultural and Food Economics 5(1) 9
Lewis W A (1954) Economic development with unlimited supplies of labour The manchester
school 22(2) 139-191
Ivanic M and Martin W (2017) ldquoSectoral Productivity Growth and Poverty Reduction
National and Global Impacts World development
Maritime C (2001) Rural non-farm activities and poverty alleviation in sub-Saharan Africa
NRI Policy Series 14
Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in
Reducing Poverty Evidence from Ethiopia Kenya and Ugandardquo Ch7 in in Otsuka
Estudillo and Sawada (eds) Rural Poverty and Income Dynamics in Asia and Africa
Abingdon UK Routled
Michael C and Tilman D (2017) Comparative analysis of environmental impacts of
agricultural production systems agricultural input efficiency and food choice
Environmental Research Letters 12(6)
Owusu V A Abdulai and S Abdul-Rahman (2011) Non-Farm Work and Food Security
Among Farm Households in Northern Ghana Food Policy 36 108ndash18
Oseni G amp Winters P (2009) Rural nonfarm activities and agricultural crop production in
Nigeria Agricultural Economics 40 189-201
Picazo-Tadeo A J Reig-Martinez E and Hernandez-Sancho F (2005) Directional distance
functions and environmental regulation Resource and Energy Economics 27(2) 131-
142
Ranis G and Stewart F (1993) Rural nonagricultural activities in development Theory and
application Journal of development economics 40(1)75-101
Rijkers B and Costa R 2012 Gender and rural non-farm entrepreneurship World Develop
40 (12) 2411ndash2426
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
52
Rosenbaum PR and Rubin D B (1984) Reducing Bias in Observational Studies Using Sub
classification on the Propensity Score Journal of the American Statistical Association
79 (387) 516-524
Salami A Kamara A B and Brixiova Z (2010) Smallholder agriculture in East Africa
Trends constraints and opportunities Tunis African Development Bank
Scharf M M and Rahut D B (2014) Nonfarm employment and rural welfare evidence from
the Himalayas American Journal of Agricultural Economics 96(4) 1183-1197
Sheahan M B and Christopher B (2014) Understanding the Agricultural Input
Landscape in Sub-Saharan Africa Recent Plot Household and Community- Level Evidence
World Bank Policy Research Working Paper No 7014
Ulubaşoğlu M A Hoang T X and Pham C S (2014) Non-farm activity household
expenditure and poverty reduction in rural Vietnam 2002ndash2008 World
Development 64 554-568
Wang H Yang J Jin S ChenK Riedinger J and Peng C (2015) Migration Local Off-
farm Employment and Agricultural Production Efficiency Evidence from China
Journal of Productivity Analysis 2(2015) 24-40
Woldehanna T (2000) Economic Analysis and Policy Implications of Farm and Off-farm
Employment A Case Study in Tigray Region of Ethiopia Unpublished Masterrsquos Thesis
Wageningen University Wageningen the Netherlands
World Bank 2011 World Development Indicators The World Bank Washington DC USA
World Bank 2016 World Development Indicators The World Bank Washington DC USA
Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)
Massachusetts The MIT Press Cambridge
Zereyesus Y A Embaye W T Tsiboe F and Amanor-Boadu V (2017) Implications of
Non-Farm Work to Vulnerability to Food Poverty-Recent Evidence From Northern
Ghana World Development 91 113-124
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