Boda-Bodas Rule: Non-Agricultural Activities and Their Inequality Implications in Western Kenya

GIGA Working Paper No. 48

34 Pages Posted: 3 May 2007 Last revised: 9 Jan 2015

See all articles by Jann Lay

Jann Lay

GIGA German Institute of Global and Area Studies; University of Goettingen

Toman Omar Mahmoud

Kiel Institute for World Economics

George Michuki M'Mukaria

German Institute of Global and Area Studies (GIGA)

Date Written: April 1, 2007

Abstract

Engagement in non-agricultural activities in rural areas can be classified into survival-led or opportunity-led. Survival-led diversification would decrease inequality by increasing the incomes of poorer households and thus reduce poverty. By contrast, opportunity-led diversification would increase inequality and have a minor effect on poverty, as it tends to be confined to non-poor households. Using data from Western Kenya, we confirm the existence of the differently motivated diversification strategies. Yet, the poverty and inequality implications differ somewhat from our expectations. Our findings indicate that in addition to asset constraints, rural households also face limited or relatively risky high-return opportunities outside agriculture.

Keywords: Income diversification, non-agricultural activities, inequality, poverty, sub-Saharan Africa, Kenya

JEL Classification: Q12, O17, I31

Suggested Citation

Lay, Jann and Omar Mahmoud, Toman and M'Mukaria, George Michuki, Boda-Bodas Rule: Non-Agricultural Activities and Their Inequality Implications in Western Kenya (April 1, 2007). GIGA Working Paper No. 48. Available at SSRN: https://ssrn.com/abstract=983913 or http://dx.doi.org/10.2139/ssrn.983913

Jann Lay (Contact Author)

GIGA German Institute of Global and Area Studies ( email )

Neuer Jungfernstieg 21
Hamburg, DE D-20354
Germany

University of Goettingen

Platz der Gottinger Sieben 3
Gottingen, D-37073
Germany

Toman Omar Mahmoud

Kiel Institute for World Economics ( email )

Germany

George Michuki M'Mukaria

German Institute of Global and Area Studies (GIGA) ( email )

Neuer Jungfernstieg 21
Hamburg, DE D-20354
Germany

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