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\hypersetup{pdftitle={Assessing Market Participation in Ethiopia: How Welfare"=enhancing Can it Be?},pdfauthor={Yidnekachew Zewde},pdfsubject={Tropentag 2016: Abstract},pdfkeywords={Ethiopia, Farmers, Heckman, Market, resources, Welfare},pdfpagemode=None,colorlinks=true}
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\parbox[b]{13.4cm}{\centering \large{\textbf{Tropentag, September 18-21, 2016, Vienna, Austria}}\\[1ex] \Large{``Solidarity in a competing world ---\\fair use of resources''\\[2ex]}}
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\Large{\textbf{Assessing Market Participation in Ethiopia: How Welfare"=enhancing Can it Be?\footnote{\textbf{Contact Address:} Yidnekachew Zewde, International Crops Research Institute for the Semi-arid Tropics(ICRISAT), Socio-economics and Innovation, Gurd-Shola Ilri Campus, 5689~Addis Ababa, Ethiopia, \mbox{e-mail}: \email{yewond2005@yahoo.com}}\\[0.8ex]}}
\normalsize{\textsc{Yidnekachew Zewde}}
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\begin{itemize*}
\item[]{\small{\textit{International Crops Research Institute for the Semi-arid Tropics(ICRISAT), Socio-economics and Innovation, Ethiopia}}}
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\index[author]{Zewde, Yidnekachew}
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\textbf{Abstract}
\begin{abstract}
\normalsize{
In many parts of Ethiopia farmers often lose considerable part of their valuable resources and wealth due to lack of access and participation in agricultural markets. For instance, in livestock sub"=sector, farmers lose their saleable herds because of various underlying constraints associated to marketing. This study examines the determinants and livelihood impacts of household's market participation in crop and livestock sub"=sectors based on survey data from Ethiopia. Heckman's two"=step estimation procedure has been applied to assess the determinants of household's decision and intensity of market participation. Therefore, we follow a two"=stage model of behaviour in which the first"=stage identifies the factors that affect the decision to participate as a seller of crop or livestock, while the second"=stage assesses the determinants of how much a household would sell conditional on participation. It also investigates the impact of participation on food security status using probit regression augmented with instrumental variables. The empirical findings show that determinants and impacts of market participation differ depending on the type of sector under consideration. In livestock sub"=sector, intensity of participation is mainly influenced by the size and structure of herds, while proximity to market and marketing costs are not as such significant. In coffee and wheat markets, however, proximity to village market determines the likelihood of participation, but not extent of participation. Although there are crop and livestock"=specific determinants that require specific policy tools and institutional supports, there are also commonalities existing in those markets implying the need for generalised supports and inclusive packages. In all markets, productive capacity and supply side constraints are significant for making participation decision, and vulnerability to shocks constrain farmers' potential to take advantage of what the market could offer. The study has also shown that participation in crop market significantly improves food security status, while the impact from livestock sector appears to be quite limited. Therefore, to meaningfully improve the welfare of households through market, further efforts are needed to build production capabilities and reduce structural bottlenecks. }

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\noindent \textbf{Keywords:} Ethiopia, Farmers, Heckman, Market, resources, Welfare
\index[key]{Ethiopia}
\index[key]{Farmers}
\index[key]{Heckman}
\index[key]{Market}
\index[key]{Resources}
\index[key]{Welfare}
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