Livelihoods and farm efficiency in rural Georgia

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Abstract:

This study contributes to the literature on the role of livelihood strategies in rural growth and poverty reduction. It distinguishes between livelihood diversity strategies that contribute to sustainable growth in household incomes, and those that mainly have a ‘coping' function. It suggests that typically, the contribution of livelihood diversity to growing household income is through relaxing dependence on credit for access to capital. In this scenario, livelihood diversity would lead to higher technical efficiency in agriculture via investment and thereby to higher household incomes. Survey data from Georgia are introduced and used to test these hypotheses using a Bayesian stochastic frontier approach. The findings are relevant to defining more clearly the scope and aims of policies to stimulate the rural non-farm economy in developing and transition countries.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840500215253

Affiliations: 1: Economics Department, University of Groningen, PO Box 800, 9700 AV Groningen, The Netherlands 2: Imperial College, University of London, Wye Campus, Ashford, Kent, TN25 5AH, UK 3: Natural Resources Institute, University of Greenwich, Chatham Maritime, Kent, ME4 4TB, UK

Publication date: August 20, 2005

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