Diversification of Income in the rural sector and its impact on efficiency: Evidence for the Mexico case

This article is based on information from the National Survey to Rural Households carried out in 2008 in Mexico, and it aims to analyze the factors that influence activity diversification and, at the same time, determine its impact on the income of Mexican rural households. The econometric estimates point out that diversification is key to increase income and, thus, economic efficiency. Around 80% of the households analyzed by the survey diversifies for survival reasons, while the rest does it for accumulation reasons. This comes to show that the support policies for Mexican households must have clear focusing patterns, especially for lower-income households.