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Income Distribution Due to Diversified Livelihood Among Rural Households of Sikkim:An Impact Study


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1 Dept. of Economics, Sikkim University, Gangtok, India
     

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Income distribution in rural households throughout the world has been found through diversified form of livelihoods. A rural household has been seen as a diversified enterprise occupying diversified activities in both farm and nonfarm sectors. The extent of diversification differs among households and has differential outcome to the income distribution. Selecting 350 rural households randomly, from all four districts of Sikkim for the study purpose, this paper tries to make an inquiry of distribution of rural incomes owing to diversification of rural livelihoods. To study the problem as laid by the objective of this study, Simpson’s diversification index has been used and the extent of diversification has been measured to be 0.55. Similarly Gini coefficient has been used to calculate the inequality in income distribution and is found to be 0.378. Further decomposition of Gini inequality according to income source has been done and skilled nonfarm income as the major source of total rural income inequality has been identified. Results indicate that rural unskilled nonfarm income, self employment and business incomes have equalizing effects on total income inequality. The result indicates that despite the centrality of agriculture, rural households are engaged in other nonfarm activities for an alternative income sources.

Keywords

Rural, Sikkim, Livelihoods, Diversified, Households, Income, Gini Coefficient.
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  • Income Distribution Due to Diversified Livelihood Among Rural Households of Sikkim:An Impact Study

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Authors

Santosh Sharma
Dept. of Economics, Sikkim University, Gangtok, India
Manesh Choubey
Dept. of Economics, Sikkim University, Gangtok, India

Abstract


Income distribution in rural households throughout the world has been found through diversified form of livelihoods. A rural household has been seen as a diversified enterprise occupying diversified activities in both farm and nonfarm sectors. The extent of diversification differs among households and has differential outcome to the income distribution. Selecting 350 rural households randomly, from all four districts of Sikkim for the study purpose, this paper tries to make an inquiry of distribution of rural incomes owing to diversification of rural livelihoods. To study the problem as laid by the objective of this study, Simpson’s diversification index has been used and the extent of diversification has been measured to be 0.55. Similarly Gini coefficient has been used to calculate the inequality in income distribution and is found to be 0.378. Further decomposition of Gini inequality according to income source has been done and skilled nonfarm income as the major source of total rural income inequality has been identified. Results indicate that rural unskilled nonfarm income, self employment and business incomes have equalizing effects on total income inequality. The result indicates that despite the centrality of agriculture, rural households are engaged in other nonfarm activities for an alternative income sources.

Keywords


Rural, Sikkim, Livelihoods, Diversified, Households, Income, Gini Coefficient.

References