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Rural Household Decision to Participate in Off farm Work: Using a Double Hurdle Model.

Hussein. N. Nassoro

Rural Household decision to engage in off farm work passes through two hurdles firstly, decision to participate and then extent or intensity of participation. Using the Tanzania national panel survey data, this study investigated factors determining household labour decision on whether to participate or not and intensity of participation using a double hurdle model. A likelihood ratio test confirmed that indeed participation is a two stage decision. Analytical results have shown that, marital status, land quality, farm size, level of farm output and household size are important variables that influence the decision to participate in off farm work. In addition, age, the dummy variable of male gender, marital status and land quality were the main determinants of the intensity of participation in off farm work. These factors should be considered in designing a rural development policy that focuses on promotion of off farm activities. Keywords: Double hurdle model, off farm work, logit, Tanzania