This study applied the Ordinary Least Square (OLS) regression model to investigate factors of household capital/assets that are associated with income. The word association was used as opposed to the original word „influencing? in the title of this study because of the Endogeneity of productive assets in the model that was not corrected. Association was
preferred so that interpretation is done not to mean causality.
This study used cross sectional data targeting households from Kabwe region of central Zambia where International Development Enterprises (IDE) Zambia is supporting smallholder farmers with various linkages such as credit, market and input linkages. Others include the promotion of smallholder irrigation technologies, capacity building and promotion of gender participation in income generating activities through agriculture as a way of reducing poverty among the rural poor. Households were drawn from Chikonkomene, Shakumbila, Mpima, Muswishi, Kamimbya and Malombe.
The results show that the annual per capita income of households in the six zones was 902 Euros during the 2009/10 season. Income is derived mostly from agriculture (85.9%) and non agricultural small businesses such as petty trading (9.1%) whereas wages and Remittances each accounts for 2.6 and 2.4 percent of total income respectively. The results show that there is less diversification in the six zones of Kabwe (study area). There was variation in the mean income in the six zones with Chikonkomene reporting the highest while Kamimbya had the lowest mean income.
Empirical findings show that land owned and access to water that is available through out the year for irrigation as factors representing natural capital are positively associated with income. On human capital and demographic factors, age is negatively associated with income whereas household size and number of extension visits are positively associated with income.
Access to credit as the only factor for financial capital in the study is also positively associated with income just as the productive assets that households own for physical capital. Distance to the nearest market is positively associated with income and statistically significant. Due to this inconsistency with literature findings, distance remains inconclusive. The factors listed above that are associated with income would be important in IDE?s designs of future projects that are aimed at reducing the rural households? poverty through increased income and off course upon solving the problem of Endogeneity for causation.