Rural livestock asset portfolio in northern Ethiopia: a microeconomic analysis of choice and accumulation

Livestock fulfill different functions. Depending on their livelihood strategies, households differ in their choice of what type of animal to keep and on accumulation of the chosen animal overtime. Using a panel data of 385 rural households in a mixed farming system in northern Ethiopia, this paper investigates the dynamic behavior of rural households' livestock holding to identify determinants of choice and accumulation of livestock overtime. Choice is analyzed for a principal animal, the animal that constituted the largest value of livestock assets a household possessed, using a multinomial logit model. Results indicate that rural households differ in their choice of what type of animal to keep. Agro-climatic conditions, sex and age of household head, presence of an adult male member in a household, and liquidity are the major factors that influence the type of principal animal households keep. Conditional on the principal animal selected, we analyzed the factors that determine the accumulation of the chosen animals by correcting for selection bias. Area of land cultivated is the most significant factor that explains the number of animals households keep. Other factors include sex of household head, diversification into nonfarm self-employment, and shocks.

Publication year:2012

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IOF-keylabel:yes

BOF-publication weight:1

CSS-citation score:1

Authors:International

Authors from:Higher Education