Socio-Economic Factors Affecting Farm Household Income Diversification

Diversification of the sources of financing of agricultural households is one of the basic strategies of hedging against the volatility of agricultural income. The decisions of agricultural households in this regard may be determined by multiple factors – both endogenous (depending on the household) and exogenous (external). The aim of the research is to identify socio-economic factors of agricultural households who diversify their income, which belong to the latter group. The study used data from 361 agricultural households in Central Pomerania (Poland) covering the year 2019. In order to identify socio-economic factors affecting agricultural household income diversification, a set of 9 characteristics related to the household and the farm was adopted. To achieve the assumed research goal, a two-tailed equality test for column proportions was used. It was found that the diversification of income sources is statistically significantly related to the following features: age and education of the head of the household, the number of household members, the share of dependent children and the development phase of the household. Larger households of people with higher education up to 45 years of age are most willing to diversify their income, especially those in the development phase with children as part of the family.