off-farm participation, agricultural production and ... · the study examines two east african...

52
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 21.05.2018 Abstract This study examined factors that influence off-farm activities and then, the impact of the off-farm participation on agricultural production and farmers’ 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.

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Page 1: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 2: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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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

Page 3: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 4: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 5: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

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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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Abingdon UK Routled

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

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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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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Page 6: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

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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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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

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Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for

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Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking

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Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms

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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in

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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

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

Page 7: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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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

Page 8: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 9: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 10: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

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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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Page 11: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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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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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

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Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for

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Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking

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Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms

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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

Page 12: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

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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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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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

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Page 13: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 14: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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-

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Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on

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Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for

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Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking

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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

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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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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

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Page 15: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 16: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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-

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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

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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

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

Page 17: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 18: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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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

Page 19: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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-

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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

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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

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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Page 20: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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)

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

Page 21: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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)

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

Page 22: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

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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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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

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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Page 23: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

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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

Page 24: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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)

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

Page 25: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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)

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

Page 26: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

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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

Page 27: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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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

Page 28: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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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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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

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Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for

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Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking

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Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms

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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in

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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

Page 29: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

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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

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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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Wooldridge M J (2009) Econometrics Analysis of Cross section and Panel Data (4th ed)

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Page 30: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

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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

Page 31: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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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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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

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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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Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking

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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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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in

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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

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

Page 32: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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-

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

Page 33: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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Egyei R K and Adzoror HY (2013) Household Non-Farm Income Any Influence on

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Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for

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Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking

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Loughrey J and Knapp E (2017) The single farm payment and income risk in Irish farms

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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

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-

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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

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Page 34: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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)

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

Page 35: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

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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

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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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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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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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Page 36: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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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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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

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Haggblade S Hazell P and Reardon T (2010) The rural non-farm economy Prospects for

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Himelein K (2013) Calculations for Panel Surveys with Sub-Sampling and Split-off Tracking

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Matsumoto T Yoko K and Takashi Y (2008) Role of Non-farm Income and Education in

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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

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

Page 37: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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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

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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Page 38: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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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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

Page 39: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 40: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 41: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 42: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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-

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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

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

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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

Page 43: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 44: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 45: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 46: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 47: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 48: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 49: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 50: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 51: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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

Page 52: OFF-FARM PARTICIPATION, AGRICULTURAL PRODUCTION AND ... · The study examines two East African countries– Tanzania and Uganda where agriculture is the backbone of these economies

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