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Financing rural households and its impact: Evidence from randomized field experiment data

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  • Mekonnen, Tigist

    (UNU-MERIT, and Maastricht University)

Abstract

We evaluate the short-term impact of financial support to smallholder farmers and training program to married women in two regions of Ethiopia. Using household-level panel data from the World Bank collected in 2010-2012, the combined Difference-In-Difference (DID) and matching methods are applied. The three main findings emerge from the analysis shows that first; the program seems to improve rural households’ annual income from farm and non-farm economic activities (26 percent). Second, financial incentive positively affects smallholders’ innovative farm practices, adoption of modern technologies and new marketing approach. Third, only training to resource-poor rural women is not enough to their income earning activities. Farm households engage themselves in nonfarm economic activities measured in working days positively affect households’ income. However, the whole household member participation in agricultural activities has a negative effect on income, suggesting that the surplus labor participation on a small land holding household resulting in diminishing marginal return on income.

Suggested Citation

  • Mekonnen, Tigist, 2017. "Financing rural households and its impact: Evidence from randomized field experiment data," MERIT Working Papers 2017-009, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2017009
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    More about this item

    Keywords

    Rural capacity building; innovation; technologies; randomized control trials; Ethiopia;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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