Livelihood strategies and diversification amongst the poor: Evidence from South African household surveys

Mishi, Syden; Sikhunyana, Zintle; Ngonyama, Nomasomi; Sibanda, Kin

doi:10.4102/td.v16i1.726

Cited by 9 publications

(5 citation statements)

References 23 publications

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“…This explains why the rich may keep on expanding their wealth, whilst the poor remain as poor. Mishi et al (2020) in the case of Eastern Cape province, where this study is based, found that the rich can engage in high-value economic activities yet risky such as farming (farming has become riskier of late because of unreliable rainfall and more frequent and severe droughts) and the poor lack resources to engage or to insure potential losses if they dare to engage.…”

Section: Results Presentation and Discussionmentioning

confidence: 91%

Risk aversion, path dependency and financial economic decision-making in low-income communities: Experimental evidence from South Africa

Mishi

Mwanyapedza

Katsande

et al. 2020

Journal of Economic and Financial Sciences

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Recent literature asserts that risk preferences differ amongst individuals based on many factors, and the degree of risk aversion can help understand differences in well-being (Banerjee & Ewing 2004;Concina 2014;Harrison 2019;Thomas 2016; World Bank 2015). In addition, there are many information processing errors and biases that affect decision-making by individuals and households, more severe in failed markets. Information asymmetry leads to market failure which Orientation: Poverty is deeply entrenched in South Africa, and various initiatives to reduce it have not been successful. Behavioural economics may help explain this by testing whether individuals exhibit path dependence when making decisions under uncertainty. Research purpose:The aim of this article was to test the presence of path dependence and the determinants of risk aversion.Motivation for the study: This study was conducted in Eastern Cape province of South Africa, which is largely rural, with a high level of poverty, where 36% of households depend on social security grants, and unemployment is higher than the national average.Research approach/design and method: An experimental design approach was applied, eliciting risk under different prospects. Descriptive statistics was used to determine path dependency, with random effects regression used to investigate the determinants of risk aversion. Main findings:The results show the existence of path dependence, with individuals who are more risk averse unwilling to change their choices even if they stand to win or lose more than in the previous period.Practical/managerial implications: Policymakers need to consider these behavioural characteristics in formulating policies to reduce poverty. Information and how that information is presented (framing) are central for impactful policy formulation. Contribution/value-add:The results here have policy implications on addressing triple challenges bedeviling South Africa and many developing countries.

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Section: Results Presentation and Discussionmentioning

confidence: 91%

Risk aversion, path dependency and financial economic decision-making in low-income communities: Experimental evidence from South Africa

Mishi

Mwanyapedza

Katsande

et al. 2020

Journal of Economic and Financial Sciences

Self Cite

View full text Add to dashboard Cite

show abstract

“…Assan (2014) noted that the past studies could not ascertain whether diversification enables survival or accumulation, which leads to a sustainable level of socio-economic improvement. It is clear in a number of studies that agriculture is the principal activity of rural households (Davis et al, 2017) and that poor people rely on agriculture strategies (Mishi et al, 2020). Moreover, there is acknowledgement in other studies that rural households have multiple sources of income (Ellis, 1998) and that poor people have other livelihood strategies other than agriculture (Mishi, et al, 2020).…”

Section: Selection Of Livelihoods and Adaptation Strategiesmentioning

confidence: 99%

“…It is clear in a number of studies that agriculture is the principal activity of rural households (Davis et al, 2017) and that poor people rely on agriculture strategies (Mishi et al, 2020). Moreover, there is acknowledgement in other studies that rural households have multiple sources of income (Ellis, 1998) and that poor people have other livelihood strategies other than agriculture (Mishi, et al, 2020). It is however not every rural household that has multiple sources of income and in cases where the livelihoods are diversified, the viability, strength and sustainability is questioned (Chigavazira, 2019).…”

Section: Selection Of Livelihoods and Adaptation Strategiesmentioning

confidence: 99%

Behaviour Change in Drought Response and Management: Case Study of Mudzi District, Zimbabwe

Chigavazira

Zandamela²

2021

JPAG

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This paper seeks to contribute to the droughts discourse through explaining the vulnerability of women to droughts by analysing the different livelihood strategies employed by women and their responses. The conservation of resources (COR) theory and ecological theory was applied to understand the issues of vulnerability, adaptation and coping with droughts. A qualitative approach was utilised through the application of semi-structured interviews, observation and document review tools. Although the element of behavioural change is illuminated in the behavioural theories and applied in some studies such as HIV and AIDS, this element is missing in the drought literature. In this paper, the behavioural change element that emerged is not only important but also relevant in understanding the dynamics associated with drought responses. This generates a novice understanding and explanation of the vulnerability of women to droughts and in so doing, it shapes the drought discourse beyond the traditional arena.

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“…It also varies considerably, exposing most rural households to chronic poverty [1,6,9]. It is increasingly believed that diversifying household income sources have impacted food security, reduced poverty, and improved livelihood [10][11][12][13][14][15][16][17][18]. Therefore, it needs research to understand the economic contributions and bottlenecks of income diversification at different levels and places to sustain its immense contributions.…”

Section: Introductionmentioning

confidence: 99%

Determinants of Smallholder Farmers’ Income Diversification in Sodo Zuria District, Southern Ethiopia

W/kidan,

Tafesse

2023

Advances in Agriculture

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The research aimed to estimate income diversification and investigate demographic, socioeconomic, and institutional factors that determine the smallholder farmer’s diversification of income in the Sodo Zuria district, southern Ethiopia. Cross-sectional data were collected from 353 randomly selected households. The Simpson Index of Diversity was used to summarize income diversification, and the Tobit econometric model was implemented to explore the factors affecting the income diversification of smallholder farmers. Accordingly, the mean earnings diversification among smallholder farmers was estimated at 0.56. The primary household income sources are livestock rearing, crop production, mixed farming, nonlabor income, agricultural wages, and nonagricultural wage employment. We found household age, family size, livestock ownership, use of agricultural inputs, access to credit, and participation in training activities significant factors determining smallholder farmers’ income diversification in the research area. Lack of initial capital and market access were the principal challenges to diversifying income sources. Therefore, decision-makers should work on the indicated predictors to improve income diversification activities in the study area; particularly, it is required to focus on effective credit provision systems by using modern technologies, improving agricultural input supply, and equipping farmers with better knowledge and skills on income diversification through short-term training.

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Livelihood strategies and diversification amongst the poor: Evidence from South African household surveys

Cited by 9 publications

References 23 publications

Risk aversion, path dependency and financial economic decision-making in low-income communities: Experimental evidence from South Africa

Risk aversion, path dependency and financial economic decision-making in low-income communities: Experimental evidence from South Africa

Behaviour Change in Drought Response and Management: Case Study of Mudzi District, Zimbabwe

Determinants of Smallholder Farmers’ Income Diversification in Sodo Zuria District, Southern Ethiopia

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