DETERMINANTSOFAGRICULTURALPRODUCTIVITYAND RURALHOUSEHOLDINCOMEINETHIOPIA

Abstract

Improvementsintheagriculturalproductivityandruralhousehold’sincomeandidentifyingthefactorscontributetoitsimprovementisverycriticalforenhancingfoodsecurityandpovertyreductionstrategyinEthiopia.Theaim of this paperisto investigate the factors contributing to agricultural productivity and rural households ’income differential in Ethiopia. The study used paneldata ofEthiopiansocioeconomicsurveycollectedbyCentralStatisticalAgencyofEthiopiaincollaborationofWorldBankinthethreesurveyperiodsof2012,2014and2016productionyears.ThestudywasusedeconometricmodelsderivedfromCobDoglaproductionfunctionnamely:Pooledordinaryleastsquare(withingroup),fixedeffects(FE)andrandomeffects(RE)models for labor and land productivit yandmultiplereression modelsto identify contributing factors forrural household income differential across regions. And the modeloutput indicated that, irrigation use,number of oxen, on-farm income, and education levelofhousehold head, cultivated area,ageand amountsoffertilizerused werethesignificantvariablesthatcontributetofarmincomedifferentialinthestudyarea.Therefore ,the policy implication of the study is that ,increasing and properutilization of the aforementioned variable’s should have getdueattention tospeed up the enhancement of agricultural productivity and rural householdincome.