A THEISIS SUBMITED TO THE DEPARTMENT OF ECONOMICS COLLEGE OF BUSINESS AND ECONOMICS, SCHOOL OF GRADUATE STUDIES ARBAMINCH UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMNTS FOR THE DEGREE OF MASTER OF SCIENCES IN ECONOMICS

Abstract

The main objective of this study was to assess the impact of productive safety net program (PSNP) on asset accumulation in Bale Zone, Gololcha district. To this effect primary and secondary data were collected; primary data from the rural households and secondary data from the respective Agricultural and Rural Development Bureau, PSNP Coordination office and Food Security Task Force office of the study area. Propensity score matching (PSM) was used to assess the impact of PSNP on asset accumulation. To this end, the livestock asset is converted to the Tropical Livestock Unit (TLU) while the non-livestock assets are measured based on their current market value as reported by the respondents. The PSM estimation result indicated that participation in PSNP had brought a positive and significant impact on livestock and productive assets. That is, the mean difference in TLU between the PSNP beneficiary and non-beneficiary HHs was found to be positive and significant at 5% with a value of ATT of 0.402. Similarly, the mean difference in the current value of productive assets between the two groups was found to be positive and significant at 1% level with the minimum ATT value calculated as 309.73 (based on NNM). However, the program did not brought changes in the holdings of non-productive assets. Generally, the result indicated that, due to program participation beneficiary households have higher asset size as compared to non-beneficiary households. Therefore, it is recommended that, at the moment, the PSNP beneficiary HHs are much better than the non-beneficiary HHs in terms of asset holding, the government and other concerned stakeholders has to make the necessary follow up even after graduation or else the beneficiary HHs may slide down in to their original poverty status once they graduated from the PSNP.