Economics of rural urban interaction: Case study of Kikuyu Division
Abstract
This paper examines the impact of urbanization
on farmers'management decisions on farms in the "ft-inges" o
Nairobi City with a view to identify the factors responsible fo
farm dis-investment in favour of rental housing investment.
The farming business is evaluated using farm gross margin
and a standard housing evaluation technique is used to assess t
value of the rentals. The value of farm output is subsequently
scaled by an uncertainty factor; The values of the two invest
options are then discounted over a selected range of discount r
for a period of five years,the effective life of wooden rental~
predominant type of rentals constructed by the farmers.
- An econometric model is used to isolate factot-s
responsible for allocation of land to rental housing constructi(
by the land owners.
The study shows that the farmers investment decisions a rational. Land subdivision is identified as the main cause o disinvestment; "Jhile rurel electrification and access roads ha
significan-tinfluences on the attractiveness of rentals in the
The paper suggests that the areas which are already in t
middle of the economic transformation should be encouraged to
convert their Iand to rentals
Citation
Master Of Arts In EconomicsPublisher
University Of Nairobi Department of Economics