Determinant of Rural Household Participation in Non-Farm and Level of Generated Household Income from the Activities: The Case of Haramaya Woreda, East Hararghe Zone, Ethiopia

Abstract

This study analyzed the determinant of rural household participation in non-farm and level of generated household income from the activities in Haramaya district, Ethiopia using cross-section data. Both primary and secondary data were collected for this study. Primary data were collected from 196 sample respondents using stratified random sampling. In this study both descriptive and econometric analysis was carried out. Descriptive statistics were applied to characterize the sample households in terms of economic, demographic and institutional factors. Heckman two stages selection model was used for estimation of determinant participation of rural households in non-farm activities and determinant level of income from non-farm activities. The result of factors affecting participation of rural households in non-farm activities indicated landholding size, use of irrigation, livestock holding and distance to nearest market negatively and significantly influenced participation while education, household size and non-farm training significant and positively affects participation of rural household in non-farm activities. In the result of determinant level of non-farm income shows that landholding size, use of irrigation, livestock holding and distance to the nearest market were significant and negatively affects level of non-farm income while household size and education status were significant and positively influenced level of non-farm income. In generally the study identified the determinant of rural household participation in non-farm activities and determinant level of income from non-farm activities. Therefore, Policy makers should integrate the promotion of non-farm activities in the framework of rural development policies and strategies. Keywords: participation, non-farm activities, household income, heckman two steps selection model DOI: 10.7176/JESD/11-19-02 Publication date: June 30th 2020