Poverty and the rural nonfarm economy in Oromia, Ethiopia

M.M. van den Berg, G. Earo Kumbi

Research output: Contribution to journalArticleAcademicpeer-review

36 Citations (Scopus)


The rural nonfarm sector has gained increasing importance not only in Asia but also in Africa. It is, however, widely believed that in most parts of Africa, the growth of the nonfarm economy has increased inequality and has had a limited effect on the poor, who face entry barriers to nonfarm activities. The present article analyzes the relation between nonfarm income, poverty, and inequality in Oromia, Ethiopia. We use two complementary methodologies: (i) econometric estimates of household income from the nonfarm sector; and (ii) a Gini decomposition of analysis income inequality by source. The results consistently indicate that in Oromia entry barriers to nonfarm activities is low, and the general growth of the sector will benefit the poor
Original languageEnglish
Pages (from-to)469-475
JournalAgricultural Economics
Issue numbersuppl3
Publication statusPublished - 2006


  • income inequality
  • reduction strategies
  • developing-countries
  • diversification
  • dynamics
  • africa


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