Determinants of the Non-Farm Income of rural households in Neyshabur:Application of Multilevel Tobit Model

Today the incomes of the rural non-farm sector (ie the income from wage and self-employment activities in trade, production and services) are an important source of income for farmers and other rural households, including those without land. This has led policymakers to develop these activities in rural areas. For this purpose, the present study has considered the income structure of rural households in Neyshabur county and its related factors. The data is gathered through a questionnaire survey carried out on 380 rural households from four districts (Zabarkhan, Markazi, Sarvelayat and Mianjolgeh) in the Neyshabour county. The survey is conducted between September 2017 to February 2018. The household was chosen through a multi-stage stratified random sampling. In this study, according to various studies such as Davis et al (2017), rural household income is divided into two groups: farm income (crop, orchard and livestock) and non-farm income (non-farm self-employment, wage employment, pension- profit -rent and cash subsidy) have been divided and multilevel Tobit models have been used to investigate the determinants of rural household income in each of these groups. The results of the questionnaire show that 51.16% of the average income (21.19 million Tomans) of a rural household in Neyshabur in 2016-2017 from farm and 48.83% from the non-farm sector .The results showed that household head characteristics such as age, sex and education did not affect the farm income and the income of this sector was dependent on variables such as farmland size, farmland ownership, number of livestock and number of employees in the sector. In addition, the results revealed that higher education of the household head only affected non-farm wage income and access to credit only on non-farm self-employment income. It is noteworthy that the increase in the number of households employed if they were engaged in non-farm self-employment has generated more annual household income than all five groups of rural households.