Effect Of Non-Farm Enterprise Income On Poverty In Ghana

Abstract

The purpose of this study is to determine the effect of non-farm income on household’s poverty status in Ghana. This study was approached using a cross sectional study and employed a secondary data from the updated seventh round of the Ghana Statistical Service. The study focused on Two-Stage least square estimation model in analysing the findings of the study. The study found that non-farm income has a significant and reducing effect on the poverty status of household considering either the unidimensional (consumption poverty) and multidimensional poverty. However, the results showed that even though both measures are quite consistent in analysing the poverty status of households in Ghana, the multidimensional approach proves to be more robust as it considers several dimensional measures in its computation. The study therefore recommends that the government through the Ministry of Agriculture and relevant non-state actors create an enabling environment through the provision of credit, transportation infrastructure, and education and training on the relevant of non-farm activities for household since it plays an integral role in alleviating household poverty. Researchers should also incorporate the multidimensional approach in measuring household poverty since several dimensional measures are considered in its computation.