Determinants of the Non-Farm Income of rural households in Neyshabur: Application of Multilevel Tobit Model

Document Type : Research Paper

Authors

1 Agriculrural Economics Department, Agricultural Faculty, Ferdowsi University of Mashhad, Mashhad, Iran

2 Professor in Agricultural Economics Department, Agricultural Faculty, Ferdowsi University of Mashhad, Mashhad, Iran

3 Professor in Agricultural Economics Department Agricultural faculty, Ferdowsi University of Mashhad, Mashhad, Iran

4 Professor in Agricultural Economics Department, Agricultural Faculty, Ferdowsi university of Mashhad, Mashhad, Iran

Abstract

Today, the incomes of the rural non-farm sector are an important source for farmers and other rural households, especially those without agricultural land. In this regard, the present study has considered the income structure of rural households in Neyshabur County and and its related factors. Data were obtained by completing a questionnaire and multi-stage stratified random sampling method from 380 rural households in the county during September 2017 to February 2018 .The two-level Tobit model was used to analyze the determinants of rural household income. The results show that that 51.16% of the household average income (21.19 million Tomans) in 2016-2017 from the farm (crop, horticulture, and livestock) and 48.83% from the non-farm sector (non-farm self-employment, wage employment, pension- profit -rent and cash subsidy). The results of estimating the two-level Tobit model for each source of income show that the village factor has not affected the fluctuation of income from crop, horticulture, livestock and non-farm self-employment and has not affected the income from non-farm wages. Also, the results revealed that higher education of the household head only affected non-farm wage income and access to credit only on non-farm self-employment income. It is noteworthy that the increase in the number of households employed if they were engaged in non-farm self-employment has generated more annual household income than all five groups of rural households. According to the results, the policy proposal of this study is to facilitate the establishment of non-farm businesses by improving access to credit and increasing technical and vocational training and skills courses in rural areas.

Keywords

References

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Iranian Journal of Agricultural Economics and Development Research
Volume 52, Issue 2
May 2021
Pages 247-262

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