Die Bodenkultur - Journal for Land Management, Food and Environment

L. Juvančič, M. Košar and E. Erjavec:

Survey-based Analysis of Determinants of Income Diversification in Agricultural Households of Slovenia


The paper investigates the issue of income diversification among rural households in Slovenia. Special emphasis is given to the analysis of characteristics of agricultural households that determine their income diversification strategies. The data used in the analysis is based on a survey of 120 rural households. Empirical insight to the key income diversification determinants is provided by the application of a multiple discriminant analysis. The results largely confirm the hypothesis that household members, in pursuit of their income objectives, choose between various income alternatives with respect to (1) available production assets, (2) capacity of labour supply and abilities to compete on non-farm labour market and (3) individual motives and preferences. Based on these results, the paper gives some broad recommendations on how to develop a differentiated rural development policy framework that takes into account diversified income and activity portfolios of rural households in Slovenia. Key words: income diversification, labour allocation, employment decisions, non-farm rural employment, multiple discriminant analysis.