DETERMINANTS OF NON-FARM INCOME PARTICIPATION ANDITS IMPLICATION ON HOUSEHOLDS WELFARE IN RURAL AREAS OF MESKAN WOREDA

Abstract

Recently, there is a growing recognition that rural households receive their income from diverse portfolio of activities and one of the most important of these activities is connected with the rural non-farm sector. This study examines the determinants ofnon-farm income participation and its implication on household welfare in Meskanworeda SNNPR of Ethiopia.The study used a cross sectional survey type that was employed both qualitative and quantitative design. Amulti-stage sampling technique procedure was used to select 150 rural household used for this study. Logistic regression models and Heckman two-stage model were also used to determine factors that affect non-farm activities participation and ruralhousehold welfare respectively. Result of Logistic regression reveals that the major factors that determine participation in non-farm activities were the Age of the household heads, Education level, Cultivated land , Employment status, Access to credit, and Non-agricultural income . The result of Heckman two-stage model revealed that the important factors that determine household’s welfare in the study area the Age of household heads education status, access to electricity, access to credit and cultivated land. Therefor participating in non-farm activities apart from farm work was improved household welfare.