Determinants of household probability to take up non-farm activity-an application of logit analysis

Abstract

Non-farm activities play an important role in rural economy in a country like India. In order to examine the factors influencing to take up non-farm activity, the present study utilized the data collected in the irrigated command area of Mandya district. The data collected on 900 households, selected using two stage sampling is used in the study. Logit model is used to identify the determinants of household probability to take up non-farm activity. The entire command area one-third of households have probabilities of more than 0.5 to take up non-farm activity. The variables education, age, number of working adults and annual farm income, land holding were significant in the model in classification of households into households with and without non-farm activity. The households which had younger members, and who have more years of schooling and three or four working adults and larger land holding have a greater chance of taking up non-farm activity. In areas with less irrigation, farm households take up non-farm activity as an alternate source of income.