A triple-hurdle model of small-ruminant production and marketing in the highlands of Ethiopia: Implications for commercial transformation

Summary

This paper analyses factors that influence Ethiopian households’ decisions to produce and marketsmall ruminants using a triple-hurdle econometric model. The model integrates production, marketposition and volume of sales, allowing us to make inferences relating to the study population. Theresults are based on a dataset collected from 5 000 households and 497 rural communities in thehighlands of Ethiopia. Our results show that, among other things, younger household heads, male-headed households, and households with relatively higher labour supply are more likely to engagein small-ruminant production. Flock size is an important determining factor of market participationand volume of sales. In addition, in areas where small-ruminant production is likely, market accessstands out as an important determinant of household market position. Finally, our results show thatthe small-ruminant sub-sector is price nonresponsive, suggesting that households liquidate theiranimals in need of cash, not necessarily to maximise profit.