Household diversification into nonfarm work activities is a major rural livelihood strategy in many developing economies. In this paper, we explore empirically if rural households in Uganda leverage their nonfarm earnings to overcome credit constraints and invest in high yielding maize seed varieties. We use a semiparametric estimator of binary outcomes that accommodates endogenous regressors straightforwardly to estimate the effect of nonfarm income on technology adoption decisions. Our results show that nonfarm income has a positive and significant effect on the adoption of improved maize seed.
Monday, April 6, 2015