Kiel Working Papers, Kiel Institute for World Economics
No 1314:
Boda Bodas Rule: Non-agricultural Activities and Their Inequality Implications in Western Kenya
Jann Lay, George Michuki M'Mukaria and Toman Omar Mahmoud
Abstract: Engagement in non-agricultural activities in rural areas
can be classified into survival-led or opportunity-led. Survival-led
diversification would decrease inequality by increasing the incomes of
poorer households and thus reduce poverty. By contrast, opportunity-led
diversification would increase inequality and have a minor effect on
poverty, as it tends to be confined to non-poor households. Using data from
Western Kenya, we confirm the existence of the differently motivated
diversification strategies. Yet, the poverty and inequality implications
differ somewhat from our expectations. Our findings indicate that in
addition to asset constraints, rural households also face limited or
relatively risky high-return opportunities outside agriculture.
Keywords: Income diversification, non-agricultural activities, inequality, poverty, sub-Saharan Africa, Kenya; (follow links to similar papers)
JEL-Codes: Q12,; O17,; I31; (follow links to similar papers)
30 pages, March 2007
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