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Journal of Applied Sciences
  Year: 2009 | Volume: 9 | Issue: 9 | Page No.: 1647-1657
DOI: 10.3923/jas.2009.1647.1657
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Use of Dynamic Models to Assess Impact of Changing Tea Prices on Family Income of Smallholders in Kenya

E.K. Nyaga and W. Doppler

This research aimed at understanding the effect of changing tea prices on welfare of smallholders in Kenya. A total of 60 tea farmers were interviewed. After data collection and preliminary analysis, multivariate cluster analysis was done to classify the families into two groups. Based on findings of statistical analysis of resources and living standards of the families, a strategy of changing the tea prices was formulated. Raising the prices of tea was hypothesized to increase family income. Ten year dynamic models were applied to measure the impact of this strategy on family income. Two types of data were used. The first set was averages from statistical analysis of survey data and the second set of data was prices of tea for a period of 12 years obtained from the local tea factory. Analysis of these prices indicated fluctuation and since the main objective was to test the impact of fluctuation on family income, future random prices were created using the 12 years prices. Optimal family income was first calculated using tea prices obtained from the survey and later recalculated using random prices. Results indicated that fluctuation in tea prices has low effect on stability of family income among the tea smallholders in the survey region.
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How to cite this article:

E.K. Nyaga and W. Doppler, 2009. Use of Dynamic Models to Assess Impact of Changing Tea Prices on Family Income of Smallholders in Kenya. Journal of Applied Sciences, 9: 1647-1657.

DOI: 10.3923/jas.2009.1647.1657






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