This paper uses four-period panel data
\ncovering the years 2001, 2004, 2008 and 2011 to analyse the roles of rural income
\ndiversification during the global financial crisis. Income diversification is commonly defined as a
\nproportion of income derived from non-farm activities or the number of income portfolios. However,
\nthe use of such measures is problematic because
\nthe income diversification variable is sensitive to assumptions about the
\nthresholds used to assign households to
\ndifferent income categories. To address this concern, following Dimova and Sen (2010), we use the Herfindahl
\nindex constructed as the sum of squares of the shares of different income portfolios in
\nthe household: the smaller the index value, the higher the degree of income diversification. Using both fixed- and random-effects models,
\nwe find that the number of male household
\nmembers aged 15-64, household head primarily engaged in agriculture, durable assets, agricultural land endowment, health
\nshock and crop failure are the key determinants of income diversification in rural Cambodia,
\nwhere households\u2019 diversification behaviour is mainly motivated by the desire to accumulate
\nrather than by survival concerns. This finding suggests that richer households are better
\nable than poorer households to seize the advantages provided by a diversified income portfolio. It
\nalso implies that accumulation-led diversification has less impact on poverty, at least in the
\nshort run, than survival-led activity. Therefore policies that reduce constraints on
\ndiversification, such as risk reduction strategies, microcredit provision, rural services, rural non-farm
\nenterprise development, infrastructure and education improvements are in general desirable. Using the interaction of health shock and crop
\nfailure as an instrumental variable, we
\nconfirm that income diversification is strongly and positively associated with
\nper capita consumption but is unlikely
\nto help smooth consumption during a crisis. This result holds even if we use the poverty headcount ratio as the
\nmeasure of household welfare outcomes. These findings strengthen the need for well-designed
\npublic safety nets as a risk-reducing and coping strategy. <\/p>\n","protected":false},"excerpt":{"rendered":"
This paper uses four-period panel data covering the years 2001, 2004, 2008 and 2011 to analyse the roles of rural income diversification during the global financial crisis. Income diversification is commonly defined as a proportion of income derived from non-farm activities or the number of income portfolios. However, the use of such measures is problematic because the income diversification variable is sensitive to assumptions about the thresholds used to assign households to different income categories. To address this concern, following […]<\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[5],"tags":[],"class_list":["post-33085","publications","type-publications","status-publish","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n