The impact of beekeeping on household per capita income: evidence from Northwest

Ethiopia

Zewdu Abro1, Menale Kassie2, Haymanot Alebel3, Bedaso Taye1 , Zemen Ayalew4 , Workneh
Ayalew1

June 2021

1 Paper Accepted for the 31st International Conference of Agricultural Economists, 17-31 August
2 2021, Virtual Conference

_______________________________
1
International Centre of Insect Physiology and Ecology, Addis Ababa, Ethiopia
2
International Centre of Insect Physiology and Ecology, Nairobi, Kenya
3
Woldia University, Woldia, Ethiopia
4
Bahir Dar University, Bahir Dar, Ethiopia

Abstract

3 This study assesses the impact of beekeeping farming on rural households’ per capita income in
4 Southwest Amhara State of Ethiopia. We estimated beekeeping’s impact using the endogenous
5 switching regression treatment effects approach, applied on 392 randomly selected households
6 (221 beekeeping and 171 non-beekeeping farming households). Our results show that adoption of
7 beekeeping farming increased the per capita income by ETB 3,418 compared to their status if they
8 were not practicing beekeeping farming. Households who are not currently practicing beekeeping
9 could have increased their per capita income by ETB 442. These results indicate that beekeeping
10 farming can improve rural people’s livelihoods where crop production is a primary source of
11 livelihood. However, the income difference between beekeeping and non-beekeeping households
12 reveals that targeted extension services may reduce the income gap. Finally, we have also shown
13 that beekeeping can benefit farmers by pollinating tree crops and increasing fertilizer use for crop
14 production.
15
16 Keywords: Beekeeping farming, income, pollination service, Endogenous switching regression,
17 treatment effects

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18 1. Introduction

19 Across the globe, beekeeping provides several valuable benefits to farming societies. It supports
20 the agricultural production ecosystem by pollinating crops and thereby increasing yields of
21 pollinated dependent crops. Annually, the pollination services of bees are worth US$ 215 billion
22 worldwide (Smith et al., 2014). Beekeeping is also a livelihood source to millions of people along
23 the beekeeping value chains (Bradbear, 2009). Bees and beekeeping can increase the resilience of
24 smallholders’ livelihoods by creating a buffer against economic shocks caused by climatic shocks
25 such as droughts by relaxing liquidity constraints. Income from beekeeping could support
26 investment in agricultural inputs, children’s schooling, and consumption smoothing, among others.
27 Beekeeping also contributes to the maintenance of biodiversity, and bees benefit from diverse
28 natural habitats for forage and nesting (Krishnan et al., 2020). Beekeepers could further contribute
29 to forest conservation as forests are the key source of forage for the bees. The medicinal and
30 nutritional properties of beekeeping products are widely known, further contributing to beekeeping
31 households’ nutrition and food security (Manyi-Loh et al., 2011). Finally, beekeeping can
32 empower women and youth as it requires minimal resources such as land, labor, and water (Fuller,
33 2014; Mburu et al., 2017; Shackleton et al., 2011).

34 Despite these potentials of the beekeeping sector, there remains insufficient documentation on
35 beekeeping’s contribution to peoples’ livelihoods. Studies that assess the contribution of
36 beekeeping to income growth, poverty reduction, and food security are limited. The focus of many
37 studies on the contribution of livestock and crops to household welfare misses the contribution of
38 beekeeping (Bradbear, 2009). Even the existing studies provide conflicting findings. Some argue
39 that beekeeping is a desperate activity of the poor that may not contribute to poverty reduction
40 (Amulen et al., 2017; Belayhun, 2014; Kumwenda, 2016). Other authors argue that beekeeping
41 can increase beekeepers’ income, thereby their welfare (Affognon et al., 2015; Chanthayod et al.,
42 2017; Kassie et al., 2020). These studies, except that of Affognon et al. (2015) that used propensity
43 score matching, did not establish cause and effect relationship. For instance, Amulen et al. (2017)
44 concluded that beekeeping does not benefit farmers, but the authors did not establish appropriate
45 counterfactuals. To design interventions that truly impact the beekeeping sector, broadening the
46 empirical base on the sector’s benefits to rural livelihood remains essential.

1
47 This study evaluates the impact of beekeeping on rural households’ per capita income using cross-
48 sectional household survey data collected in the Amhara State of Ethiopia. This study contributes
49 to the existing literature by estimating the impact of beekeeping farming adoption using an
50 endogenous switching regression treatment effects approach. The study’s findings can inform
51 policymakers on beekeeping’s potential economic benefits to justify investment in scaling up this
52 sub-sector to improve farmers’ livelihood resilience and economic growth. Given that extension
53 services to beekeeping are limited in many developing countries, including Ethiopia, this study
54 would contribute to debates to tailor the traditional agricultural extension systems to take
55 beekeeping as an integral part of its activities. In turn, promoting sustainable beekeeping helps to
56 integrate it with broader sustainable development initiatives stipulated in the sustainable
57 development goals through the conservation of biodiversity and serving as an essential source of
58 livelihood for many farming households.

59 The rest of the paper is structured as follows. In Section 2, we briefly describe the status of
60 beekeeping and the policy context in Ethiopia. Section 3 describes the data and study area. In
61 Section 4, we present the econometric methods, while Section 5 presents results. In Section 6, we
62 make concluding remarks.

63 2. The status of beekeeping and policy context in Ethiopia

64 Agriculture accounts for nearly 40% of the Gross Domestic Product (GDP), employs 80% of the
65 labor force, generates 90% of export earnings, and 30% of government tax revenue (NPC, 2016).
66 The livestock subsector from the agriculture sector contributes up to 20% to Ethiopia’s GDP and
67 livelihoods of 60-70% of the population (MOI, 2016). Beekeeping contributes to 1.3% of the
68 agricultural GDP of the country (Akessa, 2016). On average, Ethiopia produces 48,712 thousand
69 tonnes of honey and owns 5.89 million managed bee colonies (CSA, 2020). The country is ranked
70 first in honeybee colonies in Africa, tenth in honey production, and fourth in beeswax production
71 in the world (Girma and Gardebroek, 2015; Rivera et al., 2007).

72 The beekeeping value chain is an integral part of the economic activity that creates job
73 opportunities for nearly 2 million people in Ethiopia (Drost and van Wijk, 2011). It brings
74 substantial opportunity for many landless farmers, including women, and youth to improve their
75 livelihoods. For this reason, the beekeeping sector is attracting the attention of the government and

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 76 its development partners to invest in the sector to reduce youth unemployment (NPC, 2016). For
77 instance, the MasterCard Foundation is investing millions of dollars in the beekeeping sector to
78 create jobs for over 70 thousand unemployed youth in the country (MF, 2020). Despite the
79 potential of beekeeping to employment, foreign exchange earnings, and livelihood opportunity, it
80 is significantly affected by honeybee colony losses due to diseases and pests, indiscriminate
81 application of agro-chemicals for crop protection, and poor-quality beekeeping products (Akessa,
82 2016; EIAR, 2017; Ejigu et al., 2009; Girma and Gardebroek, 2015; Pirk et al., 2016; Tassew et
83 al., 2018). These problems contribute to the existing low productivity of the sector, which is
84 associated with the low adoption of modern beekeeping practices and technologies (CSA, 2020).

85 To address the beekeeping sector’s challenges, the Ethiopia’s Government introduced its
86 beekeeping policy in 2009 (Federal Negarit Gazeta, 2009). The policy acknowledges the
87 constraints of the beekeeping sector. It obliges actors to manage apiculture resources sustainably
88 and contribute to the country’s aspiration to economic development by reducing food insecurity
89 and poverty reduction. After introducing the policy, many companies have emerged along the
90 beekeeping value chain, including traders, beekeeping equipment producers, and processors
91 (Girma and Gardebroek, 2015).

92 3 Study sites and survey design

93 The Amhara State contributes 23% of the total honey production and the number of occupied
94 beehives in the country (CSA, 2020). Many farmers practice beekeeping as a supplementary
95 income-generating activity. On average, farmers earn US$ 353 per year from the sale of honey
96 (Ejigu et al., 2009). However, beehives’ productivity remains relatively small compared to the
97 potential yield, which is around 40 and 60 kg per hive per year for transitional and modern frame
98 hives, respectively (Sebeho, 2015). Estimates show that productivity is about 8 kg/colony/year in
99 the State. The low productivity is partly explained because traditional methods are the dominant
100 beekeeping production system. Only less than 5% of the farmers own modern beehives (CSA,
101 2020). Honey also plays a vital social role because it is a major ingredient to produce traditional
102 honey-wine (tej), a high value drink in weddings and religious celebrations throughout the country.

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103

104 Figure 1. Map of the study area and distribution of sample households

105 We collected the data from three zones, four districts, and 12 villages of the Amhara State (Figure
106 1). The three zones contribute more than 25% of the State’s honey production and 41% of the
107 beehives (CSA, 2020). The survey was conducted in 2018 on a one-to-one interview basis, using
108 a structured survey questionnaire administered by well-trained and experienced enumerators who
109 speaks the local language. We selected the sample households using a multistage sampling
110 technique. In the first stage, we selected four districts with a high potential for beekeeping. In the
111 second stage, we randomly selected three villages from each district. Finally, after we identified
112 the villages, we prepared the entire list of beekeeping and non-beekeeping households in each
113 selected village. The households’ list served as a sampling frame from which we randomly selected
114 the final list of households for the interview. We randomly selected 392 beekeeping and non-
115 beekeeping households. In this paper, we drop 11 observations because of missing values for most

4
116 of the variables for these observations. The survey covers a wide range of household- and village
117 variables that influence technology adoption and income.

118 2 Conceptual framework and estimation strategy

119 Participation in beekeeping might not be random. Being a beekeeper could be influenced by
120 observed and non-observed characteristics. For instance, beekeeping is likely to be adopted by
121 experienced and wealthy farmers. Addressing such self-selection remains important to quantify
122 the true impact of being a beekeeper. The most widely used impact evaluation tools in non-
123 experimental studies include propensity score matching (PSM), instrumental variable (IV), and
124 endogenous switching regression (ESR) techniques. The PSM assumes that once observable
125 characteristics are controlled for, the choice of beekeeping as a livelihood strategy is random and
126 uncorrelated with the household income per capita. The PSM’s key criticism is that systematic
127 differences in per capita income between the beekeeping and non-beekeeping households may
128 persist even after controlling for the decision-makers’ observed characteristics because of
129 unobserved heterogeneity (Smith and Todd, 2005). An alternative would be employing the
130 classical instrumental variable (IV) estimator, but this estimator ignores the treatment variable’s
131 (adoption of beekeeping) interaction with other explanatory variables. This means that the
132 explanatory variables’ coefficients might be different between the beekeeper and non-beekeeper
133 households (Di Falco et al., 2011; Kassie et al., 2018). Instead of using the classical IV estimator,
134 we use the endogenous switching regression (ESR) model (Di Falco et al., 2011; Kassie et al.,
135 2018; Lokshin and Sajaia, 2004). The ESR relaxes the classical IV estimator’s assumption by
136 estimating a separate regression model for beekeeping adopters and non-adopters so that each
137 variable in the regressions has a different coefficient for beekeeper and non-beekeeper households.
138 Unlike the PSM, the ESR accounts for potential unobserved heterogeneity that might lead to
139 estimation bias not only through the non-linearity of the selection model but also using exclusion
140 restrictions. The exclusion restrictions serve as instrumental variables that affect the decision to do
141 beekeeping but not the outcome variable, per capita income of the households (Di Falco et al.,
142 2011). In the next two subsections, we discuss the ESR and how we estimate the various treatment
143 effects.

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144 2.1 The Endogenous Switching Regression (ESR) model

145 The ESR is implemented in two stages (Lokshin and Sajaia, 2004). In the first stage, the probability
146 of participating in beekeeping is modeled using a probit model. Assume 𝐴∗ is a latent variable that
147 captures the expected benefits of beekeeping compared to non-beekeeper households. We specify
148 the latent variable for each household 𝑖 as:

1 if 𝐴∗𝑖 > 0
149 𝐴∗𝑖 = 𝒁𝑖 𝛼 + 𝜂𝑖 with 𝐴𝑖 = { (1)
0 otherwise,

150 In equation (1), 𝑖 denotes an individual beekeeper, 𝒁 represents vectors of variables that affect the
151 decision to adopt beekeeping, 𝜂𝑖 represents the error term. Household 𝑖 chooses to participate in
152 beekeeping (𝐴𝑖 = 1) if its benefit is positive ( 𝐴∗𝑖 > 0).

153 In the second stage, we separately estimate the per capita income of beekeeper and non-beekeeper
154 households. We define the two endogenous switching regimes equations 2a and 2b:
155 Regime 1: 𝑌1𝑖 = 𝛽1 𝑿1𝑖 + 𝜎1 𝜆̂1𝑖 + 𝜀1𝑖 , 𝐴𝑖 = 1 (2a)
156 Regime 2: 𝑌0𝑖 = 𝛽0 𝑿0𝑖 + 𝜎0 𝜆̂0𝑖 + 𝜀0𝑖 , 𝐴𝑖 = 0 (2b)

157 where 𝑌1𝑖 and 𝑌0𝑖 are the ith household per capita income and 𝑿 is a vector of explanatory variables.
158 𝜆̂, is the estimated inverse Mills ratio derived from equation (1), and 𝜀 is a vector of error terms
159 with an expected value of zero. 𝛽1 and 𝛽0 are a vector of unknown parameters to be estimated.

160 In addition to the non-linearity of the selection model of adoption (Mills’ ratio), we used exclusion
161 restrictions that serve as instruments in equation (2a-2b). We use the social network of households
162 as an exclusion restriction. The social network variable is a dummy variable, which is one if the
163 households know friends and/or neighbors who have modern beehives and 0 otherwise. Social
164 networks play a key role in technology adoption through facilitating the exchange of information
165 and resources and reducing the cost of accessing such information and resources (Bandiera and
166 Rasul, 2006; Di Falco and Bulte, 2013; Isham, 2002). Farmers who know beekeeping friends and
167 neighbors are more likely to be a beekeeper themselves, which affects the decision to be a
168 beekeeper or not.

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169 2.2 Estimating the average adoption effects

170 Following Carter and Milon (2005) and Kassie et al. (2015), and the impact evaluation literature
171 (Heckman et al., 2001), we demonstrate how our endogenous switching treatment regression
172 model is used to estimate the conditional actual and counterfactual outcomes of adoption and
173 evaluate the adoption effects. The counterfactual is defined as the per capita income beekeepers
174 (non-beekeepers) would have obtained if the returns (coefficients) on their characteristics had been
175 the same as the returns (coefficients) on the characteristics of the non-beekeepers (beekeepers).
176 From equation (2), the following conditional expectations for each outcome variable can be
177 computed:

178 𝐸(𝑌1𝑖 |𝐴𝑖 = 1) =𝑿1𝑖 𝛽1 + 𝜎1 𝜆̂1𝑖 (3a)

179 𝐸(𝑌0𝑖 |𝐴𝑖 = 0) =𝑿0𝑖 𝛽0 + 𝜎0 𝜆̂0𝑖 (3b)

180 𝐸(𝑌0𝑖 |𝐴𝑖 = 1) =𝑿1𝑖 𝛽0 + 𝜎0 𝜆̂1𝑖 (3c)

181 𝐸(𝑌1𝑖 |𝐴𝑖 = 0) =𝑿0𝑖 𝛽1 + 𝜎1 𝜆̂0𝑖 (3d)

182 Equations (3a) and (3b) represent the actual expected household income per capita observed in the
183 sample, while equations (3c) and (cd) are the counterfactual expected household income per capita.

184 Table 2: Expected outcomes, treatment, and heterogeneity effects of participation in beekeeping
Sub-sample Decision stage Treatment
Beekeepers Non-beekeepers effects
Beekeepers (a) (Y1i |𝐴𝑖 = 1 ) (c) 𝐸(Y0i |𝐴𝑖 = 1 ) TT
None-beekeepers (d) 𝐸(Y1i |𝐴𝑖 = 0 ) (b) 𝐸(Y0i|𝐴𝑖 = 0) TU
185 Notes: TT=Cell (a) minus Cell (c); TU=Cell (d) minus Cell (b); TH=TT−TU.

186 Table 2 summarizes the expected outcomes, the treatment, and heterogeneity effects (Carter and
187 Milon, 2005; Di Falco et al., 2011; Heckman and Vytlacil, 2001). The treatment effect on the
188 treated (TT) of beekeeping households is the difference between equations (3a) and (3c):

189 𝑻𝑻 = 𝐸(𝑌1𝑖 |𝐴𝑖 = 1) − 𝐸(𝑌0𝑖 |𝐴𝑖 = 1)

190 = 𝑿1𝑖 (𝛽1 − 𝛽0 ) + (𝜎1𝜂 − 𝜎0𝜂 )𝜆1𝑖 (4)

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191 which represents the effect of using beekeeping on outcome variables for households that practice
192 beekeeping. Similarly, the treatment on the untreated (TU) for the households that did not practice
193 beekeeping is the difference between (3d) and (3b),

194 𝑻𝑼 = 𝐸(𝑌1𝑖 |𝐴𝑖 = 0) − 𝐸(𝑌0𝑖 |𝐴𝑖 = 0)

195 = 𝑿2𝑖 (𝛽1 − 𝛽0 ) + (𝜎1𝜂 − 𝜎0𝜂 )𝜆0𝑖 (5)

196

8
197 4 Results and discussion

198 We present the definition and summary statistics of variables in Table 1. The first key variable in
199 this paper is the beekeeping status of the households, and bee colonies. About 57% of the
200 households practice beekeeping. On average, the households own around 3 beehives. The
201 community-level stock of bee colonies is about 460. Bee colonies are an important community
202 assets that provides for pollination services for pollination-dependent crops.

203 Table 1. Definition of variables and summary statistics

Mean Std.
Variables Dev.
Key dependent and independent variables
Beekeeping households (1/0) 0.57 0.50
Number of bee colonies owned by the household 2.98 4.39
Number of bee colonies in the kebele 416.63 256.30
Household income per capita (ETB/person) 6386.11 4938.34
Contribution of beekeeping to total income (%) 4.02 6.06
Value of crop production (ETB/ha) 19861.66 12989.21
Value of pollination-dependent crops (ETB/ha) 2526.84 5594.51
Value of pollination-independent crops (ETB/ha) 17334.82 11454.60
Household characteristics
Value of household asset (ETB) 4826.27 6203.11
Livestock ownership (TLU) 4.11 2.38
Mobile ownership (1/0) 0.52 0.50
Household size (number) 5.46 1.85
Characteristics of the head of the household
Age of the head of the household (years) 47.32 12.60
Illiterate (1/0) (reference) 0.48 0.50
Primary school (1/0) 0.45 0.50
High school and above (1/0) 0.07 0.25
Head obtained a training on beekeeping (1/0) 0.12 0.32
Head has marketable skills (e.g., carpentering) (1/0) a 0.06 0.23
Head has access to market information (1/0) 0.46 0.50
Head knows the benefits of bees to pollination (1/0) b 0.54 0.50
Head knows friends or neighbor practicing beekeeping (1/0) 0.35 0.48
District information
Machakel (1/0) 0.20 0.40
North Mecha (1/0) 0.27 0.44
Dangila (1/0) 0.27 0.44
Ankesha (1/0) 0.26 0.44
204 a
marketable skills are defined as skills that the head of the household can use to earn additional income other than
205 beekeeping and crop production (e.g., carpentering); b the farmers were asked a yes or no question if they are aware
206 of the benefits of bees to pollination.

9
207 The key outcome variables in our analysis are income per capita, value of crop production for
208 pollination-dependent and independent crops. The income per capita of the sample households
209 were 6,386 ETB per person per year. Beekeeping contributes 4% of total income of the sample
210 households. The contribution of beekeeping is smaller than the contribution of beekeeping reported
211 by Mulen et al. (2017) in selected villages in Uganda (7%) and Belayhun (2014) in Tolay (17%),
212 Ethiopia. Even though the direct contribution is relatively small, farmers who practice beekeeping
213 has a higher income per capita than non-beekeeping households (Figure 2).

214

215
216 Figure 2. Cumulative distribution of income per capita by beekeeping status

217 Besides its direct income contribution, beekeeping can increase household income through
218 different pathways. In this sub-section, we discuss these potential pathways. This would help
219 substantiating the estimated treatment effects discussed in the previous section. The first key
220 pathway that beekeeping influences household livelihood is through pollination services provided
221 by bees. Table 6 presents the results of the estimated production function. Columns (1)-(9) of Table
222 6 reports the estimated production functions, which were estimated for all crops, pollinator-

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223 dependent crops, and pollinator-independent crops.1 Even though most of the coefficients are
224 positive, all of them are not statistically significant. Perhaps, the beekeeping indicators’ effect is
225 taken up by the coefficient of fertilizer use, which might be strongly correlated with beekeeping
226 adoption, as shown in Table 6. Table 7 shows the correlation between beekeeping practices and
227 the value of production of permanent crops grown by the sample households. As column 2 of
228 Table 7 shows, the value of production from pollination dependent tree crops (e.g., fruits) has a
229 strong correlation with the number of bee colonies in the village. Beekeeping can help smallholder
230 farmers invest in productivity-enhancing technologies, such as fertilizer and pesticides by relaxing
231 credit constraints. We show the potential effect of beekeeping on fertilizer and pesticides (Table
232 6). The number of bee colonies in the farming communities is strongly correlated with fertilizers
233 and pesticides use. Farmers may use the income from beekeeping may contribute to relaxing credit
234 constraints and invest on productive inputs such as fertilizers. The cumulative distributions
235 reported in Figure 3 shows that investment in chemical fertilizers by farmers are much higher for
236 beekeeping farmers than non-beekeeping ones. Beekeeping may also benefit farming communities
237 indirectly through pollination services. Figure 4 shows that the value of pollination-dependent
238 crops of the beekeeping farmers is much higher than the non-beekeeping farmers. There might still
239 be unobserved factors that drive income per capita differences between beekeeping and non-
240 beekeeping households. In the next subsection, we report the effect of beekeeping on income per
241 capita after controlling for observed and unobserved factors that may drive differences in income
242 per capita between the two groups of households.

1
The definition of pollination-dependent and -independent crops are defined following the literature in Ethiopia
(Mulatu et al., 2020).

11
243

244 Figure 3. Cumulative distribution of fertilizers uses by beekeeping status

245

12
246 Figure 4. Cumulative distribution of value of pollination-dependent crops by beekeeping status

247 We report the estimated parameters in Table 3. Columns (1) and (2) report the estimates of the
248 impact of practicing beekeeping on income per capita using ordinary least squire (OLS) and two-
249 stage least squares (2SLS), respectively. We present these two models’ results for comparison
250 purposes. The OLS estimate in column (1) shows that the coefficient of practicing beekeeping is
251 positive but statistically insignificant. However, the coefficients of the OLS model are biased and
252 inconsistent because of self-selection in beekeeping. When we address the selection problems in
253 column (2) using the classical instrumental variable approach, the 2SLS model, the coefficient of
254 practicing beekeeping is statistically significant. The results show that beekeeping households
255 have a 52% higher income per capita than households that do not practice beekeeping.

256 Column (3) shows the selection model for the endogenous switching regression in equation (1).
257 The household’s propensity to be beekeepers depends on the variable used as an exclusion
258 restriction. Those farmers who have a social network who used modern beehives are more likely
259 to practice beekeeping themselves. Thus, the social network variable’s coefficient picks up
260 inherent differences in beekeeping choice stemming from unobserved factors. The coefficient of
261 assets and livestock ownership also reveals that richer households seem to have a higher propensity
262 to be beekeepers. The district dummies also indicate that there might be geographical factors that
263 affect the probability of practicing beekeeping.

264 Columns (4) and (5) of Table 4 report the endogenous switching regression models in equations
265 (2a) and (2b). Unlike the OLS and the instrumental variable approach (2SLS) model, the
266 endogenous switching regression model explicitly accounts for potential differences in observed
267 and unobserved factors between households that practice beekeeping and those that do not. The
268 likelihood-ratio test for the three equations’ joint independence indicates that a restricted
269 specification with a single dummy variable using the OLS in column (1) is rejected. The income
270 per capita model’s coefficients in columns (4) and (5) show heterogeneities in observable
271 characteristics between beekeeping and non-beekeeping households.

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272 Table 4. Estimated parameters

ESR
Income per capita Income per capita
model: ESR model: 2nd stage
(ETB/person/year) a (log)
First stage (Income per capita, log)
Non-
Beekeeper Beekeeper
OLS 2SLS beekeeper
s (1/0) s
s
Explanatory variables (1) (2) (3) (4) (5)
Beekeepers (1/0) 0.092 0.521**
(0.072) (0.265)
Household knows friends or neighbor practicing
0.111 0.811***
beekeeping (1/0)
(0.071) (0.171)
Characteristics of the households
Household size (log) -0.684*** -0.704*** 0.041 -0.663*** -0.740***
(0.080) (0.090) (0.212) (0.108) (0.129)
Value of household asset (ETB) (log) 0.166*** 0.136*** 0.448*** 0.288*** 0.092**
(0.022) (0.039) (0.085) (0.052) (0.038)
Livestock ownership (TLU) (log) 0.108*** 0.088** 0.223* 0.151*** 0.058
(0.025) (0.045) (0.127) (0.056) (0.052)
Mobile ownership (1/0) 0.117* 0.120* -0.144 0.125 0.098
(0.070) (0.065) (0.171) (0.081) (0.099)
Residence location altitude (meters above sea level,
-1.298 -1.608** 3.516 -0.020 -3.546**
log)
(0.940) (0.797) (2.616) (0.862) (1.607)
Age of the head (years) (log) -0.044 -0.075 0.342 -0.091 -0.025
(0.114) (0.117) (0.282) (0.159) (0.159)
Head Read and write (1/0) 0.067 0.052 0.096 0.021 0.096
(0.069) (0.066) (0.164) (0.077) (0.107)
Head obtained beekeeping training (1/0) -0.040 -0.106 0.328 -0.124 -0.062
(0.097) (0.103) (0.286) (0.104) (0.201)
Head has marketable skills (1/0) -0.348*** -0.319** -0.291 -0.287 -0.453**
(0.114) (0.144) (0.320) (0.214) (0.214)
Head has access to market information (1/0) -0.019 -0.002 -0.152 0.028 -0.047
(0.066) (0.066) (0.170) (0.079) (0.109)
Head knows the benefits of bees to pollination (1/0) 0.061 0.037 0.222 0.038 0.011
(0.061) (0.061) (0.152) (0.070) (0.099)

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 District fixed effects controlled Yes Yes Yes Yes Yes
36.170**
Constant 18.586** 21.106*** -31.524 7.936
*
(7.193) (6.165) (20.124) (6.733) (12.319)
Model Statistics
𝜎𝑖 0.517*** 0.662***
(0.028) (0.076)
𝜌𝑖 -0.128 -0.725***
(0.209) (0.258)
Likelihood Ratio test (𝜒 2 ) 8.85**
Number of observations 392 392 392 392 392
273 *** p<0.01, ** p<0.05, * p<0.1; robust standard errors in brackets. The models in columns (3-5) are estimated using full information maximum likelihood; The
274 unit of analysis is households; a the exchange rate was 26.1 ETB/$US in 2018;

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275 4.1 Treatment effects

276 The last column of Table 5 shows the estimated impact on adopters (TT) and non-adopters (TU)
277 of beekeeping farming, netted out observed and unobserved heterogeneities that may affect the
278 beekeeping participation and its impact. Households that would have earned ETB 3,418 per capita
279 (that is about 51%) less if they did not practice beekeeping, which is slightly less than the estimates
280 of the 2SLS model. Had the non-beekeeping households decided to be beekeepers, they would
281 have earned about ETB 442 per capita (about 11%) more income than what they currently earn.

282 Table 5: Beekeeping framing impact on household per capita income (ETB)
Decision stage
Beekeeping farming Non-beekeeping farming Adoption
Sub-sample adoption adoption effects
Beekeeping
households (a) 6,653 (c) 3,235 TT=3,418***
(241) (126) (272)
Non-beekeeping
households (d) 4,543 (b) 4,101 TU=442*
(192) (187) (268)
283 Notes: Standard errors in parentheses; TT=Cell (a) minus Cell (c); TU=Cell (d) minus Cell (b); *** p<0.01; ** p<0.05;
284 * p<0.10.
285

286 5 Concluding remarks

287 In this paper, we estimate the impact of beekeeping on income per capita using data from
288 Northwest Amhara, Ethiopia. Despite the recognition of beekeeping as an important economic
289 activity, its economic benefits are rarely rigorously quantified. The existing evidence also provides
290 conflicting evidence on the role of beekeeping. Furthermore, most of the existing studies did not
291 establish clear counterfactuals to estimate the income levels in the absence of beekeeping. The
292 lack of counterfactuals may under(over) estimate beekeeping’s actual benefits, which has an
293 important policy implication to promote the sector.

294 From the results of this study, three important implications emerged. First, the findings justify the
295 government’s executing and enforcing the beekeeping policy to promote sustainable honey and
296 production and protect apiculture resources (e.g., pollinator habitats). Mainstreaming beekeeping
297 extension in potential districts of the country would help to execute the beekeeping policy. This

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298 will further boost the income of beekeepers, meet the domestic demand for honey, and increase
299 foreign exchange earnings through the export of honey, beeswax, and other hive products such as
300 royal jelly, bee venom and pollen. Second, our empirical findings show differences in
301 characteristics (observed and unobserved) between beekeeping and non-beekeeping studied
302 households. The differences in characteristics suggest the importance of providing appropriate
303 skills and entrepreneurship training.

304 Third, our pathway analysis reveals that beekeeping is strongly correlated with fertilizer use, one
305 of the key inputs that farmers make a substantial investment in crop production. We also find a
306 strong correlation between beekeeping and the value of production from pollination dependent tree
307 crops (e.g., fruits), indicating the potential channels that beekeeping benefits the farming
308 communities. However, these estimates are based on the sub-sample of farmers who produced
309 pollination-dependent crops. Future studies that would like to focus on estimating beekeeping’s
310 impact may need to get a representative sample of pollination-dependent and -independent crops.
311 Furthermore, our study did not uncover the effect of beekeeping on crop quality. We recommend
312 future studies to focus on the benefit of beekeeping improving crop quality and human nutrition
313 as sources of income diversification and relaxing credit constraints to smallholder farmers.

314

315

316 Acknowledgments

317 The MasterCard Foundation supported this research under the icipe-led Young Entrepreneurs in
318 Silk and Honey (YESH). Besides, we gratefully acknowledge core financial assistance to icipe
319 provided by the Foreign, Commonwealth and Development Office (FCDO), UK; the Swedish
320 International Development Cooperation Agency (Sida); the Swiss Agency for Development and
321 Cooperation (SDC), the German Federal Ministry for Economic Cooperation and Development
322 (BMZ), Federal Democratic Republic of Ethiopia and the Kenyan Government. The views
323 expressed herein do not necessarily reflect the official opinion of the donors or icipe.

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