Livelihood diversification and moneylending in a Rajasthan village: what lessons for rural financial services?

The complexity of rural economies in developing countries is increasingly recognised, as is the need to tailor poverty reduction policies according to the diversity of rural households and their requirements. By reference to a village in Western India, the paper examines the results of a longitudinal micro-level research approach, employed for the study of livelihood diversification and use of informal finance. Over a 25-year period, livelihoods are shown to have become more complex, in terms of location, types of non-farm activities, and combinations of activities. Moreover, livelihood pathways taken continue to be critically affected by economic and social inequalities implicit in the caste system and tribal economy. A longitudinal micro-level research approach is shown to be one that can effectively identify the many complexities of rural livelihoods and the continued dependence on the informal financial sector, providing important insights into the requirements for rural financial products and services.

Relating traits to diversification: A simple test

We describe a simple comparative method for determining whether rates of diversification are correlated with continuous traits in species-level phylogenies. This involves comparing traits of species with net speciation rate (number of nodes linking extant species with the root divided by the root to tip evolutionary distance), using a phylogenetically corrected correlation. We use simulations to examine the power of this test. We find that the approach has acceptable power to uncover relationships between speciation and a continuous trait and is robust to background random extinction; however, the power of the approach is reduced when the rate of trait evolution is decreased. The test has low power to relate diversification to traits when extinction rate is correlated with the trait. Clearly, there are inherent limitations in using only data on extant species to infer correlates of extinction; however, this approach is potentially a powerful tool in analyzing correlates of speciation.

Diversification of a large genus in a continental biodiversity hotspot: temporal and spatial origin of Muraltia (Polygalaceae) in the Cape of South Africa

Phylogenetic relationships in the largely South African genus Muraltia (Polygalaceae) are assessed based on DNA sequence data (nuclear ribosomal ITS, plastid atpB-rbcL spacer, trnL intron, and trnL-F spacer) for 73 of the 117 currently recognized species in the genus. The previously recognised subgenus Muraltia is monophyletic, but the South African endemic genus Nylandtia is embedded in Muraltia subgenus Psiloclada. Subgenus Muraltia is found to be sister to subgenus Psiloclada. Estimates show the beginning of diversification of the two subgenera in the early Miocene (Psiloclada, 19.3+/-3.4 Ma; Muraltia, 21.0+/-3.5 Ma) pre-dating the establishment of the Benguela current (intermittent in the middle to late Oligocene and markedly intensifying in the late Miocene), and summer-dry climate in the Cape region. However, the later increase in species numbers is contemporaneous with these climatic phenomena. Results of dispersal-vicariance analyses indicate that major clades in Muraltia diversified from the southwestern and northwestern Cape, where most of the species are found today.

‘Once a miner, always a miner’: Poverty and livelihood diversification in Akwatia, Ghana

This paper offers an alternative viewpoint on why people choose to engage in artisanal mining – the low tech mineral extraction and processing of mainly precious metals and stones – for extended periods in sub-Saharan Africa. Drawing upon experiences from Akwatia, Ghana’s epicentre of diamond production since the mid-1920s, the analysis challenges the commonly-held view that the region’s people are drawn to artisanal mining solely because of a desire ‘to get rich quick’. A combination of events, including the recent closure of Ghana Consolidated Diamonds Ltd’s industrial-scale operation and decreased foreign investment in the country’s diamond industry over concerns of it potentially harbouring ‘conflict’ stones from neighbouring Coˆte D’Ivoire, has had a debilitating economic impact on Akwatia. In an attempt to alleviate their hardships, many of the town’s so-called ‘lifetime’ diamond miners have managed to secure employment in neighbouring artisanal gold mining camps. But their decision has been condemned by many of the country’s policymakers and traditional leaders, who see it solely as a move to secure ‘fast money’. It is argued here, however, that these people pursue work in surrounding artisanal gold mining communities mainly because of poverty, and that their decision has more to do with a desire to immerse in activities with which they are familiar, that offer stable employment and consistent salaries, and provide immediate debt relief. Misdiagnosis of cases such as Akwatia underscores how unfamiliar policymakers and donors are with the dynamics of ASM in sub-Saharan Africa.

Livelihood diversification and the expansion of artisanal mining in rural Tanzania: drivers and policy implications

This paper provides an extended analysis of livelihood diversification in rural Tanzania, with special emphasis on artisanal and small-scale mining (ASM). Over the past decade, this sector of industry, which is labour-intensive and comprises an array of rudimentary and semi-mechanized operations, has become an indispensable economic activity throughout Sub-Saharan Africa, providing employment to a host of redundant public sector workers, retrenched large-scale mine labourers and poor farmers. In many of the region’s rural areas, it is overtaking subsistence agriculture as the primary industry. Such a pattern appears to be unfolding within the Morogoro and Mbeya regions of southern Tanzania, where findings from recent research suggest that a growing number of smallholder farmers are turning to ASM for employment and financial support. It is imperative that national rural development programmes take this trend into account and provide support to these people.

The impact of exchanges rates on international real estate portfolio allocation

This paper, examines whether the asset holdings and weights of an international real estate portfolio using exchange rate adjusted returns are essentially the same or radically different from those based on unadjusted returns. The results indicate that the portfolio compositions produced by exchange rate adjusted returns are markedly different from those based on unadjusted returns. However following the introduction of the single currency the differences in portfolio composition are much less pronounced. The findings have a practical consequence for the investor because they suggest that following the introduction of the single currency international investors can concentrate on the real estate fundamentals when making their portfolio choices, rather than worry about the implications of exchange rate risk.

Non-normal real estate return distributions by property type in the UK

Investment risk models with infinite variance provide a better description of distributions of individual property returns in the IPD UK database over the period 1981 to 2003 than normally distributed risk models. This finding mirrors results in the US and Australia using identical methodology. Real estate investment risk is heteroskedastic, but the characteristic exponent of the investment risk function is constant across time – yet it may vary by property type. Asset diversification is far less effective at reducing the impact of non‐systematic investment risk on real estate portfolios than in the case of assets with normally distributed investment risk. The results, therefore, indicate that multi‐risk factor portfolio allocation models based on measures of investment codependence from finite‐variance statistics are ineffective in the real estate context

Real estate portfolio size and risk reduction

The reduction of portfolio risk is important to all investors but is particularly important to real estate investors as most property portfolios are generally small. As a consequence, portfolios are vulnerable to a significant risk of under-performing the market, or a target rate of return and so investors may be exposing themselves to greater risk than necessary. Given the potentially higher risk of underperformance from owning only a few properties, we follow the approach of Vassal (2001) and examine the benefits of holding more properties in a real estate portfolio. Using Monte Carlo simulation and the returns from 1,728 properties in the IPD database, held over the 10-year period from 1995 to 2004, the results show that increases in portfolio size offers the possibility of a more stable and less volatile return pattern over time, i.e. down-side risk is diminished with increasing portfolio size. Nonetheless, increasing portfolio size has the disadvantage of restricting the probability of out-performing the benchmark index by a significant amount. In other words, although increasing portfolio size reduces the down-side risk in a portfolio, it also decreases its up-side potential. Be that as it may, the results provide further evidence that portfolios with large numbers of properties are always preferable to portfolios of a smaller size.