Household economic portfolio

• Main Authors: Aragon, Gabrielle Denise A., Cu, Leah Francine C., Illescas, Jo Anne S.
• Format: text
• Language: English
• Published: Animo Repository 2008
• Online Access: https://animorepository.dlsu.edu.ph/etd_honors/353
• Institution: De La Salle University

This paper examines the significant factors which can influence the choice of households in diversifying income sources. The behavior of households in allocating labor to different income sources is also studied. This study made use of the merged data of the 2003 Family, Income and Expenditure Survey and the Labor Force Survey. The choice of a households among the different options available is scrutinized using a multinomial logit model. Different reasons were discovered that motivate and influence ones diversification behavior. These motivations could range from simply increasing income, to stabilizing it, to increasing the opportunities of its members in having a better position in the market. In the Philippine setting, human capital, family structure and environmental factors affect the way households allocate its labor. Estimation results showed that those in rural areas tend to have more sources of income as work in rural areas is mostly agriculture activities which provide a highly volatile income. The number of children also affects positively the number of sources of income of a household. And based on the human capital theory, the level of education is positively related with the earnings thus the higher the educational attainment of the households head, the higher is his expected earnings and thus the lesser is his incentive to diversity.