Abstract:
This study aims to identifying determinants of income diversification at household level in Sri
Lankan estate sector. Analysis builds on data of Household Income and Expenditure Survey
2009/2010 conducted by Department of Census and Statistics of Sri Lanka. The data set
covered 1736 households in Sri Lankan estate sector. Herfindhal Index was applied to
calculate income diversification at household level and Censored Tobit model was used to
identify the determinants of income diversification. The econometric analysis shows that
gender and age of the household head, household size, ownership of agricultural land,
number of workers above 15 years old and availability of migrants in a household have
significantly contributed to the performance of income diversification. Further study
indicates that migrants of estate household play a critical role in non estate income. All in
all, the study clearly depicts that income diversification has become one of the important
strategies of income improvement in estate households
