Slipping into and out of welfare: the case of cocoa farming households in Nigeria

Abstract

The dynamics of falling into and out of welfare between cocoa seasons was examined using panel data sets collected in two waves from 366 cocoa farming households in Southwestern, Nigeria. The data was subjected to descriptive statistics and the Markovian Model Analysis. The welfare status were decomposed into high, medium and low based on the tercile classification of the per capita household expenditure of the cocoa farming households. Socio-economic characteristics showed that the household heads have mean age of 54 ±12.64 years, household size of 7 ±3.19 persons, and year of cocoa farming experience spanning about 28 ± 14.41 and age of the cocoa trees as 30 ± 19.21 years. The welfare transition matrix showed initial probability in the short-run as 0.2131, 0.5164 and 0.2705,which means 21.21, 51.64 and 27.05 percent in the Low, Medium and High welfare categories respectively, while the long-run equilibrium analysis results are 0.14385, 0.60596, and 0.25019,which represents 14.39, 60.60 and 25.02 percent welfare in the low, medium and high welfare categories respectively. The results showed that there was a decrease from both low and high welfare group into the medium category showing there is transition into and out of the welfare categories among Cocoa Farming Households in Southwest, Nigeria.

Keywords: Transition, Welfare, Cocoa, Markov chain, Nigeria