Livelihood strategies of farmers in Bolivar, Ecuador Assets, livelihood choice and well- being in rural households Robert Andrade Jeffrey Alwang George

Livelihood Livelihood strategies of strategies of

farmers in Bolivar, farmers in Bolivar, EcuadorEcuador

Assets, livelihood choice and Assets, livelihood choice and well-being in rural well-being in rural

householdshouseholdsRobert Andrade

Jeffrey Alwang

George W. Norton

Victor Barrera

Problem statement Problem statement

Bolivar province is relatively rural and Bolivar province is relatively rural and households depend heavily on agricultural households depend heavily on agricultural productionproduction

Households face several challenges:Households face several challenges:• Price and income uncertainty due to unequal access Price and income uncertainty due to unequal access

to markets, overproduction and shortages during to markets, overproduction and shortages during certain seasonscertain seasons

• Low crop yields due to environmental conditions, Low crop yields due to environmental conditions, use of traditional technologyuse of traditional technology

• Conditions lead to overuse of natural resources, Conditions lead to overuse of natural resources, expansion of crops to fragile areasexpansion of crops to fragile areas

• Except for migration, there are limited opportunities Except for migration, there are limited opportunities outside of agricultureoutside of agriculture

Problem statementProblem statement

Activity diversification is a natural response Activity diversification is a natural response for poor households in the provincefor poor households in the province

Ability to uptake alternative activities is Ability to uptake alternative activities is determined by levels of human and other determined by levels of human and other assets:assets:

• Low levels of educationLow levels of education• Unequal distribution of physical and natural assetsUnequal distribution of physical and natural assets• Lack of adequate infrastructure like roads, schools, Lack of adequate infrastructure like roads, schools,

irrigation, potable waterirrigation, potable water• Slow accumulation of financial assets due to transaction Slow accumulation of financial assets due to transaction

costs and incomplete or missing marketscosts and incomplete or missing markets• Lack of trust in social organizationsLack of trust in social organizations

ObjectivesObjectives

To identify successful livelihood To identify successful livelihood strategies and analyze factors strategies and analyze factors affecting adoption of such strategiesaffecting adoption of such strategies

• Describe and characterize the livelihood Describe and characterize the livelihood strategies realized by residentsstrategies realized by residents

• Identify the determinants of adoption of Identify the determinants of adoption of alternative livelihood strategiesalternative livelihood strategies

• Establish the relationship between Establish the relationship between livelihood choices and household wellbeinglivelihood choices and household wellbeing

• Determine household changes in well-being Determine household changes in well-being from policy changefrom policy change

MethodsMethods Survey data on household characteristics and Survey data on household characteristics and

assets, livelihood strategies, and well-being.assets, livelihood strategies, and well-being. Identify livelihood strategies using a clustering Identify livelihood strategies using a clustering

protocol and hierarchical cluster methodsprotocol and hierarchical cluster methods Estimate impacts of variables that affect the Estimate impacts of variables that affect the

probability of livelihood adoption using a probability of livelihood adoption using a multinomial logit modelmultinomial logit model

Correct for selectivity bias while measuring the Correct for selectivity bias while measuring the impact of livelihood strategy adoption on impact of livelihood strategy adoption on household well-beinghousehold well-being

Use results from econometric models to examine Use results from econometric models to examine impacts of policy change in education and impacts of policy change in education and irrigation on livelihood adoption and well-beingirrigation on livelihood adoption and well-being

Cluster methodsCluster methods Cluster protocolCluster protocol

Identify activities or Identify activities or combination of activities combination of activities engaged in by the engaged in by the householdshouseholds

Intensity that each Intensity that each household devotes to each household devotes to each activityactivity

Use additional variables Use additional variables where necessarywhere necessary

Variables usedVariables used Agriculture productionAgriculture production

• Crop productionCrop production• Livestock productionLivestock production

Agricultural wage workAgricultural wage work• Work in other farmsWork in other farms

Off farm wage workOff farm wage work• Own business activitiesOwn business activities• RemittancesRemittances• Rural non-farm labor Rural non-farm labor

marketmarket Additional variables used Additional variables used

Natural and physical Natural and physical assetsassets

Own consumption shareOwn consumption share Percentage of farm land Percentage of farm land

dedicated to crops and dedicated to crops and pasturepasture

Hierarchical cluster methodHierarchical cluster method Used to test and Used to test and

corroborate the corroborate the classification resulting classification resulting from the cluster protocol from the cluster protocol

The squared Euclidean The squared Euclidean distance was used to distance was used to define similarities among define similarities among householdshouseholds

Low Euclidean Low Euclidean distance=more alikedistance=more alike

High Euclidean High Euclidean distance=more unlikedistance=more unlike

Ward’s method was used Ward’s method was used as the agglomerative as the agglomerative linkage. This method links linkage. This method links households with the households with the lowest increase in the lowest increase in the error sum of squareserror sum of squares

i

iijij

xz

2

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2

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Error sum of squares

Standardization formula

i

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2

1

2

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i

iijij

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Error sum of squares

2

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Multinomial logit modelMultinomial logit model

Allows us to Allows us to Identify which variables Identify which variables

affect household affect household decisions to adopt decisions to adopt different livelihoodsdifferent livelihoods

Estimate the relative Estimate the relative probability of selecting probability of selecting a particular livelihood a particular livelihood strategystrategy

Determine the marginal Determine the marginal effect of one unit effect of one unit change in households change in households characteristics on the characteristics on the relative odds ratiorelative odds ratio

AssumptionsAssumptions Error terms assumed to Error terms assumed to

be logistically be logistically distributeddistributed

Livelihood strategies do Livelihood strategies do not have specific order; not have specific order; no implicit rankingno implicit ranking

Livelihood strategies Livelihood strategies are unique and are unique and mutually exclusivemutually exclusive

Livelihood adoption and well-Livelihood adoption and well-beingbeing

Consider the following model of Consider the following model of household well-being: ln yhousehold well-being: ln yikik==ΩβΩβkk+u+uii

The essential problem is we do not The essential problem is we do not observe yobserve yikik for strategies (out of a for strategies (out of a universe of M such strategies) that universe of M such strategies) that household i does not adopthousehold i does not adopt

Define yDefine y**kk to be a latent variable for to be a latent variable for

unobserved income in the kunobserved income in the kthth strategy and express ystrategy and express y**

kk==ξλξλkk++ηηkk

Livelihood adoption and Livelihood adoption and household well-beinghousehold well-being

Outcome K is chosen if yOutcome K is chosen if y**kk > max (y > max (y**

jj) for j≠k) for j≠k

Define Define εεkk=max(y*=max(y*jj-y*-y*kk) for j≠k) for j≠k

Then Then εεkk=max(=max(ξλξλjj++ηηjj- - ξλξλkk--ηηkk) which leads to a ) which leads to a multinomial logit specification of the determinants multinomial logit specification of the determinants of livelihood adoption (under assumptions laid out of livelihood adoption (under assumptions laid out above)above)

Because livelihood choice and well-being outcomes Because livelihood choice and well-being outcomes are jointly determined we need to account for are jointly determined we need to account for selection into the livelihood choice. Standard selection into the livelihood choice. Standard method in a binary case is to use Heckman’s method in a binary case is to use Heckman’s correctioncorrection

Livelihood adoption and well-Livelihood adoption and well-beingbeing

Define Define ΓΓ={={ξλξλ11, , ξλξλ2,…2,…, , ξλξλMM}}

Then, following Then, following Bourguignon, Fournier Bourguignon, Fournier and Gurgand (2005), the selectivity and Gurgand (2005), the selectivity correction can be based on:correction can be based on:

0

)()|0(

|,(),0|(

ii

i

iiiii dud

P

ufuuE

Consistent estimation of B can be based on:

iMkik wPPPy ),...,(ln 21

ik w )(

Selection bias correction Selection bias correction modelmodel

We use a variant of the original Dubin-We use a variant of the original Dubin-McFadden correction to ensure unbiased McFadden correction to ensure unbiased estimatorsestimators

Data collectionData collection Household survey was

designed by INIAP and Virginia Tech scientists to gather information about households and their livelihoods

During September and November, 2006 the surveys were undertaken by INIAP technicians and undergraduate students from Bolivar University (UEB)

The data set contains information from around 1,500 persons from 286 households

Summary statisticsSummary statistics

Financial, public Financial, public and social assetsand social assets AlumbreAlumbre IllangamaIllangama

t-test or t-test or pr-testpr-test

Credit % 5 6 0.64

Distance to closest paved road (km) 0.63 4.77 0.00

Distance to closest river (km) 1.72 0.62 0.00

Distance to closest town (km) 2.57 1.51 0.00

Distance to closest city (km) 4.16 9.49 0.00

Participation in civil societies % 23 85 0.00

Family members that migrate % 40 53 0.03

Human assets Alumbre Illangamat-test or pr-test

Indigenous households % 35 100 0.00

Household members 4.70 5.75 0.00

Dependency ratio % 29 44 0.00

Household head female % 17 13 0.32

Household head age (yr) 55 43 0.00

Household highest level of education (yr) 12.51 12.08 0.60

No education % 3 2 0.50

Primary education % 36 36 0.97

Secondary education % 53 57 0.44

Secondary education+% 8 5 0.30

Household average education females (yr) 7.95 6.57 0.04

Household average education males (yr) 8.48 9.04 0.45

Background informationBackground informationIncomeIncome AlumbreAlumbre IllangamaIllangama


Crop agriculture %Crop agriculture % 100100 100100 ..

Average income $Average income $ 12621262 20772077 0.000.00

LivestockLivestock %% 4141 8585 0.000.00


Own business %Own business % 2020 2121 0.800.80


Agriculture wage %Agriculture wage % 5151 1616 0.000.00


Off farm wage %Off farm wage % 4040 5151 0.070.07


Member migrates?Member migrates? 2424 88 0.000.00


Social help %Social help % 44 1414 0.000.00

Average income $Average income $ 180180 180180 ..

ExpenditureExpendituress AlumbreAlumbre IllangamaIllangama


Total Average Total Average Expenditures $Expenditures $ 13871387 22972297 0.000.00

Expenditures per Expenditures per capita $capita $ 295295 399399 0.000.00

Ratio of food Ratio of food expenditure-income expenditure-income 0.170.17 0.160.16 0.650.65

Ratio of Ratio of expenditures-expenditures-income income 0.720.72 0.730.73 0.810.81

Variables: multinomial logit Variables: multinomial logit modelmodel

VariablesVariables DescriptionDescriptionLivelihoods Livelihoods (dependent (dependent var.)var.)

Livelihood strategy chosen Livelihood strategy chosen

Farm surfaceFarm surface Total farm size in hectares Total farm size in hectares

IrrigationIrrigation Whether or not the farm has irrigation access Whether or not the farm has irrigation access

Physical assetsPhysical assets Total estimated value in dollars of productive tools, small Total estimated value in dollars of productive tools, small livestock and cattlelivestock and cattle

EducationEducation Whether or not the individual in the household with highest level Whether or not the individual in the household with highest level of education attained secondary educationof education attained secondary education

Soil productivitySoil productivity Measure of soil quality (GIS)Measure of soil quality (GIS)

Age and square ageAge and square age Household head age Household head age

Household sizeHousehold size Number of members that are part of the householdNumber of members that are part of the household

Dependency ratioDependency ratio Percentage of members below 18 years old and above 71 years Percentage of members below 18 years old and above 71 years oldold

WatershedWatershed Whether or not the households are located in the Alumbre sub-Whether or not the households are located in the Alumbre sub-watershedwatershed

Altitude Altitude Altitude location of the household in kilometersAltitude location of the household in kilometers

Distance to riversDistance to rivers Distance to the closest river in kilometers (GIS)Distance to the closest river in kilometers (GIS)

Distance to townsDistance to towns Distance to the closest town where usually are located the Distance to the closest town where usually are located the closest school (GIS)closest school (GIS)

Distance to citiesDistance to cities Distance to the closest main city where usually are located the Distance to the closest main city where usually are located the markets (GIS)markets (GIS)

Findings: Livelihood Findings: Livelihood clustersclusters

Four livelihood Four livelihood strategies were strategies were identified:identified: Diversified Diversified

householdshouseholds Engaged in Engaged in

agricultural marketsagricultural markets Rural non-farm Rural non-farm

economyeconomy Agricultural Agricultural

consumption and consumption and wage workwage work

LivelihoodsLivelihoods %%HouseholHousehol

dsdsMembeMembe

rsrs

Diversified Diversified householdshouseholds 2727 7878 432432

Engaged in Engaged in agricultural agricultural marketsmarkets 3737 105105 576576

Rural non-Rural non-farm farm economyeconomy 1717 5050 218218

Agricultural Agricultural consumption consumption and wage and wage workwork 1919 5353 241241

TotalTotal 100100 286286 14671467

Diversified households Diversified households

Almost one third of the Almost one third of the households in the Chimbo households in the Chimbo watershed adopt this strategywatershed adopt this strategy

Households in this livelihood Households in this livelihood do not receive more than 70% do not receive more than 70% of their income from any of their income from any single activity, and mainly get single activity, and mainly get income from agriculture and income from agriculture and off farm activities off farm activities

The total farm land is almost The total farm land is almost equally distributed between equally distributed between pastures and cropspastures and crops

Highest participation in civil Highest participation in civil organizations and family organizations and family members that migrate members that migrate

Most are indigenous Most are indigenous Relatively high levels of Relatively high levels of

expenditures per capitaexpenditures per capita

VariablesVariables ValueValueAgriculture income share %Agriculture income share % 0.450.45

Agriculture wage share %Agriculture wage share % 0.020.02

Off farm income share %Off farm income share % 0.530.53

Own surface with title %Own surface with title % 0.840.84

Alumbre watershed %Alumbre watershed % 0.460.46

Land areaLand area 3.823.82

Irrigation access %Irrigation access % 0.230.23

Value physical assets $Value physical assets $ 20082008

Credit access %Credit access % 0.080.08

Distance to closest river (km)Distance to closest river (km) 1.121.12

Distance to closest city (km)Distance to closest city (km) 7.217.21

Participation in civil Participation in civil organizations %organizations % 0.600.60

Family members that migrate Family members that migrate % % 0.710.71

Mestizo households %Mestizo households % 0.310.31

Household head male %Household head male % 0.880.88

Secondary education or plus Secondary education or plus %% 0.650.65

Expenditures per capita $Expenditures per capita $ 325325

Ratio of food expenditures-Ratio of food expenditures-incomeincome 0.170.17

Engaged in agricultural marketsEngaged in agricultural markets

This is the most common This is the most common livelihoodlivelihood

Households in this livelihood get Households in this livelihood get around 90 percent of income around 90 percent of income from agricultural productionfrom agricultural production

Dedicate relatively high Dedicate relatively high percentage of land to commercial percentage of land to commercial crops (roots and a mixture of crops (roots and a mixture of grains and legumes)grains and legumes)

This group of farmers owns the This group of farmers owns the most land, physical assets, and most land, physical assets, and one third of the farms have one third of the farms have irrigation access. irrigation access.

Intensively use pesticides and Intensively use pesticides and fertilizer for production and has fertilizer for production and has the highest percentage of the highest percentage of producers that have received producers that have received technical trainingtechnical training

More than half belong to a social More than half belong to a social organization and almost all the organization and almost all the household heads are maleshousehold heads are males

Highest level of income and Highest level of income and expenditureexpenditure

VariablesVariables ValueValue

Agriculture income shareAgriculture income share 0.870.87

Agriculture wage shareAgriculture wage share 0.030.03

Off farm income shareOff farm income share 0.100.10



Land size (ha)Land size (ha) 6.796.79










Secondary education or more Secondary education or more %% 0.650.65



Rural non-farm economyRural non-farm economy(Livelihood C)(Livelihood C)

Fewest households in this Fewest households in this clustercluster

Receive almost 80 percent of Receive almost 80 percent of income from activities not income from activities not related to their own farmsrelated to their own farms

Almost all the households Almost all the households within this livelihood are from within this livelihood are from Alumbre and are near the main Alumbre and are near the main citycity

Own smallest amounts of Own smallest amounts of natural and physical assets, natural and physical assets, and one quarter of the total and one quarter of the total land is untitledland is untitled

Just one third of the producers Just one third of the producers participate in social participate in social organizations; highest organizations; highest percentage of mestizos percentage of mestizos householdshouseholds

This group has lowest This group has lowest expenditures and income expenditures and income

VariablesVariables ValueValueAgriculture income share %Agriculture income share % 0.120.12




Watershed Alumbre %Watershed Alumbre % 0.980.98











Secondary education or more Secondary education or more %% 0.660.66



Agricultural consumption and wage Agricultural consumption and wage work work

Relatively small Relatively small landholdingslandholdings

Two thirds of income is Two thirds of income is derived from agricultural derived from agricultural wage and one third from wage and one third from agricultureagriculture

Income and expenditures Income and expenditures per capita are, on average, per capita are, on average, less than one dollar per dayless than one dollar per day

Almost all the producers in Almost all the producers in this livelihood are from this livelihood are from Alumbre and own smaller Alumbre and own smaller amounts of land and the amounts of land and the lowest amount of physical lowest amount of physical assets assets

Around half of the Around half of the households are indigenous households are indigenous and have the higher and have the higher percentage of female percentage of female household heads household heads

This group has the least This group has the least education and fewest family education and fewest family members who migratemembers who migrate

VariableVariable ValueValueAgriculture income share %Agriculture income share % 0.390.39









Distance to closest river Distance to closest river (km)(km) 1.581.58


Participation in civil Participation in civil oeganizations %oeganizations % 0.380.38

Family members that Family members that migrate % migrate % 0.130.13



Secondary education or Secondary education or more %more % 0.450.45



Livelihood Strategies Livelihood Strategies ChoiceChoice

The multinomial logit model The multinomial logit model shows the sign and strength shows the sign and strength of impacts of variables on the of impacts of variables on the odds of choosing a livelihood odds of choosing a livelihood strategystrategy

Model was run with and Model was run with and without geographic without geographic variables that influence the variables that influence the decision of the householdsdecision of the households

These geographic variables These geographic variables are used as instrument are used as instrument variables for the selection variables for the selection model; they do not determine model; they do not determine wellbeing except through wellbeing except through their impact on livelihood their impact on livelihood choicechoice

The comparison group in the The comparison group in the multinomial logit model are multinomial logit model are households engaged in households engaged in agriculture marketsagriculture markets

Diversified households Diversified households vs. vs.


Higher amounts of natural Higher amounts of natural assets like farm surface and assets like farm surface and irrigation access decrease the irrigation access decrease the probability of diversifyingprobability of diversifying

Soil productivity positively Soil productivity positively associated with income associated with income diversificationdiversification

Households that farther from Households that farther from rivers and the main cities will rivers and the main cities will be more likely to engage in be more likely to engage in diverse activities diverse activities

Education negatively Education negatively associated with diversificationassociated with diversification

Location is a key determinant Location is a key determinant of livelihood strategy adoptionof livelihood strategy adoption

VariablesVariablesCoefficieCoefficie

ntsntsP>|P>|z|z|

Alumbre watershedAlumbre watershed -1.903-1.903 0.220.22

AltitudeAltitude -0.341-0.341 0.020.02

Farm surfaceFarm surface -0.097-0.097 0.010.01

Irrigation accessIrrigation access -0.590-0.590 0.070.07

Soil productivitySoil productivity 0.7240.724 0.030.03

Physical assetsPhysical assets 0.0120.012 0.130.13

AgeAge -0.152-0.152 0.030.03

Square ageSquare age 0.0010.001 0.060.06

Household sizeHousehold size 0.0830.083 0.060.06

Dependency ratioDependency ratio -0.015-0.015 0.850.85

EducationEducation -0.164-0.164 0.060.06

Distance to riverDistance to river 0.4470.447 0.060.06

Distance to townDistance to town -0.083-0.083 0.690.69

Distance to cityDistance to city 0.1530.153 0.090.09

ConstantConstant 12.70312.703 0.010.01

Rural non-farm economyRural non-farm economyvs. vs.


Farm area and value of Farm area and value of physical assets are important physical assets are important determinants of engagement determinants of engagement in non-farm rural economyin non-farm rural economy

Distance to water sources Distance to water sources positively associated with positively associated with non-farm economy (rleative to non-farm economy (rleative to agricultural markets) agricultural markets)

In this particular livelihood In this particular livelihood increasing the natural assets increasing the natural assets will reduce the probability to will reduce the probability to engage in non-farm activities, engage in non-farm activities, while increasing physical while increasing physical assets has a positive impact assets has a positive impact although these variables do although these variables do not have statistic significancenot have statistic significance

VariableVariableCoefficieCoefficie

ntsnts P>|z|P>|z|

Alumbre Alumbre watershedwatershed 2.9312.931 0.300.30




Soil productivitySoil productivity 0.0390.039 0.930.93

Physical assetsPhysical assets 0.0140.014 0.040.04

AgeAge -0.094-0.094 0.370.37


Household sizeHousehold size -0.071-0.071 0.630.63

Dependency ratioDependency ratio 0.1060.106 0.070.07

EducationEducation 0.4160.416 0.370.37





Agriculture consumption and wage work Agriculture consumption and wage work vs. vs.

Engaged in agricultural marketsEngaged in agricultural markets Higher amounts of physical Higher amounts of physical

assets and farm surface reduce assets and farm surface reduce the likelihood of being the likelihood of being engaged in agriculture wage engaged in agriculture wage work relative to agricultural work relative to agricultural marketsmarkets

More dependency associated More dependency associated with this livelihood strategywith this livelihood strategy

Education also negatively Education also negatively associated with wage work and associated with wage work and self-consumption orientationself-consumption orientation

VariablesVariablesCoefficieCoefficie

ntsnts P>|z|P>|z|

Alumbre Alumbre watershedwatershed 0.7640.764 0.720.72




Soil productivitySoil productivity -0.263-0.263 0.090.09

Physical assetsPhysical assets -0.122-0.122 0.000.00

AgeAge -0.073-0.073 0.440.44


Household sizeHousehold size -0.015-0.015 0.890.89


EducationEducation -0.697-0.697 0.100.10





Livelihood strategy Livelihood strategy selectionselection

Variables like natural and Variables like natural and physical assets generally had physical assets generally had the expected positive effect the expected positive effect on the probability of on the probability of engaging in agricultural engaging in agricultural activities while reducing the activities while reducing the probability of engaging in probability of engaging in non-farm activitiesnon-farm activities

In general increasing In general increasing education will increase education will increase engagement in livelihoods engagement in livelihoods not related to agricultural not related to agricultural production or agricultural production or agricultural wage workwage work

Location-specific assets were Location-specific assets were generally significant generally significant determinants of livelihood determinants of livelihood adoptionadoption

Livelihood strategies and Livelihood strategies and wellbeingwellbeing

In order to estimate the In order to estimate the relationship between relationship between livelihood choice and livelihood choice and household well-being household well-being we used the Dubin-we used the Dubin-McFadden correction McFadden correction for selection based on for selection based on the multinomial logit the multinomial logit resultsresults

This model enables us This model enables us to measure the to measure the counterfactual: what counterfactual: what would have been the would have been the level of well-being had level of well-being had the household adopted the household adopted an alternative livelihood an alternative livelihood strategy?strategy?

Household well-being: Diversified Household well-being: Diversified households households

Once livelihood choice Once livelihood choice is controlled for, is controlled for, several assets still are several assets still are important determinants important determinants of household well-beingof household well-being

Access to land is most Access to land is most important; as is access important; as is access to financial and to financial and physical assetsphysical assets

Household size Household size negatively associated negatively associated with well-beingwith well-being

VariableVariable Coef.Coef. P>|t|P>|t|Alumbre watershedAlumbre watershed -0.087-0.087 0.790.79

Ln farm surfaceLn farm surface 0.1580.158 0.020.02

IrrigationIrrigation 0.1030.103 0.140.14

Productive soilProductive soil -0.003-0.003 0.980.98

Ln physical assetsLn physical assets 0.0420.042 0.160.16

CreditCredit 0.3150.315 0.070.07

Female household headFemale household head -0.315-0.315 0.040.04

Age Age -0.003-0.003 0.900.90


Ln household sizeLn household size -0.277-0.277 0.070.07



Correction coefficient 1Correction coefficient 1 -0.185-0.185 0.330.33



Correction coefficient 4Correction coefficient 4 1.3081.308 0.010.01

Household well-being: Engaged in Household well-being: Engaged in agricultural marketsagricultural markets

Access to land, Access to land, physical assets, physical assets, financial assets all financial assets all importantimportant

Human assets Human assets important, especially important, especially access to labor. access to labor. Education has Education has positive effect on HH positive effect on HH well-being, but not well-being, but not statistically statistically significantsignificant

Ln wellbeing from Ln wellbeing from Livelihood BLivelihood B Coef.Coef. P>|t|P>|t|




Productive soilProductive soil 0.0520.052 0.590.59

Ln physical assetsLn physical assets 0.0640.064 0.090.09

CreditCredit 0.4340.434 0.070.07

Female household headFemale household head 0.2360.236 0.070.07

Age Age 0.0280.028 0.140.14


Ln household sizeLn household size 0.4190.419 0.010.01



Correction coefficient 1 Correction coefficient 1 -0.640-0.640 0.250.25



Correction coefficient 4Correction coefficient 4 0.6590.659 0.180.18

Household well-being: Rural non-Household well-being: Rural non-farm economyfarm economy

VariableVariable Coef.Coef. P>|t|P>|t|

Alumbre watershedAlumbre watershed 0.3700.370 0.540.54


IrrigationIrrigation -0.411-0.411 0.100.10

Productive soilProductive soil -0.245-0.245 0.030.03

Ln physical assetsLn physical assets -0.060-0.060 0.050.05

CreditCredit 0.2710.271 0.110.11

Female household Female household headhead 0.0140.014 0.910.91

Age Age 0.0350.035 0.130.13


Ln household sizeLn household size -0.023-0.023 0.880.88



Correction coefficient Correction coefficient 11 -1.805-1.805 0.020.02


Correction coefficient Correction coefficient 33 0.2090.209 0.080.08

Correction coefficient Correction coefficient 44 1.1711.171 0.060.06

Household well-being: Agriculture Household well-being: Agriculture consumption and wage workconsumption and wage work

Returns to assets Returns to assets are minimal are minimal (mostly (mostly statistically statistically insignificant) in insignificant) in this livelihoodthis livelihood

Strong evidence of Strong evidence of selection biasselection bias

VariableVariable Coef.Coef. P>|t|P>|t|




Productive soilProductive soil 0.0020.002 0.990.99

Ln physical assetsLn physical assets -0.019-0.019 0.550.55

Female household Female household headhead 0.0920.092 0.340.34

Age Age 0.0450.045 0.090.09


Ln household sizeLn household size 0.1030.103 0.510.51







Estimated wellbeing Estimated wellbeing for households engaged in agricultural for households engaged in agricultural

marketsmarkets Provide information Provide information

about relative returns, about relative returns, conditioned on conditioned on household asset base, household asset base, of moving into of moving into alternative livelihood alternative livelihood strategiesstrategies

Also examining Also examining changes in policy: changes in policy: how changes affect how changes affect livelihood adoption livelihood adoption and well-beingand well-being

Households within livelihood BHouseholds within livelihood B

VariableVariable MeanMeanStd. Std. Dev.Dev. MinMin MaxMax

WellbeingWellbeing2369.2369.

86861645.71645.7

00441.0441.0

0012625.012625.0

00

Estimated welfare if households belong Estimated welfare if households belong to to

Livelihood Livelihood A A

1965.31965.377 705.43705.43

630.1630.155 3945.693945.69

Livelihood Livelihood BB

2209.2209.6363

1036.41036.433

540.8540.800 7129.077129.07

Livelihood Livelihood CC

1860.31860.322

1347.31347.366

745.6745.622 8489.878489.87

Livelihood Livelihood DD 831.82831.82 467.25467.25 14.6214.62 1827.741827.74

Next stepsNext steps

Use geo-referencing to link current Use geo-referencing to link current situation to erosion, water quality, situation to erosion, water quality, etc.etc.

• Incorporate household model results into Incorporate household model results into watershed modelingwatershed modeling

• Simulate policy change: Simulate policy change: ΔΔpolicy→ policy→ ΔΔlivelihoods → livelihoods → ΔΔwell-beingwell-being ΔΔpolicy→ policy→ ΔΔlivelihoods → livelihoods → ΔΔenvironmental qualityenvironmental quality

Use stakeholder assessments to Use stakeholder assessments to uncover reasons behind some of the uncover reasons behind some of the anomaliesanomalies

Thank youThank you

Documents

Livelihood strategies of farmers in Bolivar, Ecuador Assets, livelihood choice and well- being in rural households Robert Andrade Jeffrey Alwang George