mohammad ehsan sadiq the contribution of carpet weaving to ... · production. in addition, the...

Mohammad Ehsan Sadiq

The Contribution of Carpet Weaving to

Household Income and its Productivity: A Case

Study of Afghanistan’s Andkhoy and Aqcha

Districts

Volume | 055 Bochum/Kabul | 2018 www.development-research.org | www.afghaneconomicsociety.org

The Contribution of Carpet Weaving to Household Income and its Productivity: A Case Study of Afghanistan’s Andkhoy and Aqcha Districts

1

The Contribution of Carpet Weaving to Household Income and its

Productivity: A Case Study of Afghanistan’s Andkhoy and Aqcha

Districts

Mohammad Ehsan Sadiq

Keyword list

Afghanistan, carpet, weaving, income, productivity

Abstract

This study aims to determine the contribution of hand-woven carpets to income and productivity

in Andkhoy and Aqcha districts in northern region of Afghanistan. The primary data were

collected from 200 carpet weaving households in the study area.

The Cobb-Douglas production function was applied to estimate households’ monthly carpet

production. In addition, the income contribution of carpet weaving was analyzed by conducting

multiple linear regressions.

The findings show that both the working hours of the laborers and the number of handlooms

used in carpet weaving are positively correlated with carpet output. The coefficient of handloom

(K) is larger than the working hour (L). The sum of the estimated coefficients is 1.17 which

reveals increasing returns to scale.

Households generate income from a variety of sources such as carpet weaving, farming and

livestock, family businesses, salary and wages and remittances. Earnings from the weaving of

carpets comprises only 37% of the households’ total income.

The proportion of women is higher than men in the industry and children comprise 24% of the

labor force. Low and decreasing demand is the major challenge that carpet weavers face in the

sector.

Description of the Data

Both primary and secondary data were used in this study. The secondary data were collected

from reliable sources such as books, academic journals and working papers and were mostly

used in the theoretical contextualization to outline the current literature. However the majority

part of this research is based on primary data. In order to obtain primary data, a questionnaire

consisting of relevant questions was designed and distributed to the participants.

The questionnaire contained four main sections. The first dealt with the demographic

characteristics of the participants, while the second section explored the financial conditions of


2

the households. The third and the most important section focused on the carpet weaving sector,

followed by the fourth section which was design to elicit the possible challenges facing the

industry.

Aqcha and Andkhoy districts are well known for their hand-woven carpets across Afghanistan,

particularly in the northern region, and thus were selected as the two most appropriate places to

carry out the research and obtain the primary data. Due to security concerns in the area, we

excluded the villages and only focused on the centers of the each districts. A team of four

surveyors was appointed to conduct the field research in the aforementioned areas. The field

research was completed in two phases, with the first phase commencing in Andkhoy district.

Four different regions that were deemed safe and primarily involved in carpet weaving were

selected in order to conduct the survey, Arabkhnai bluach, Toqilikhana, Gozari Makhdomquli

and Markaz. In each region 25 questionnaires were administered, yielding at total of 100

completed questionnaires from all four regions of Andkhoy district. In the second phase of the

study, our team went to Aqcha district and with the coordination of the Carpet Weavers’ Union,

four regions (Khairabaad, Roghanbazar, Pinjarmetra and Markaz) were selected in which to

administer the survey. As before 25 questionnaires were administered in each area, totaling 100

completed questionnaires from the four regions of Aqcha district. The households in each

region were randomly selected.

According to the Carpet Weavers’ Union, there are almost 1400 households in Andkhoy city and

2000 households in Aqcha city that are involved in carpet weaving. We included 100

households from each district to form the samples in the present study.

After data collection, the questionnaires were sorted and seven out of 200 questionnaires were

identified as invalid. The remaining 197 questionnaires were entered into an Excel database.

The collected secondary data were analyzed based on econometric models using EViews 8

software.

Research Question and Theoretical Contextualization

Based on the current economic conditions, income generation and employment are among the

most important issues affecting nearly every economy and should be taken into account when

developing and implementing national policies. Compared to other industries, carpet weaving is

a labor-intensive sector that can play a crucial role in employment and income generation in

developing countries (Nasrat & Karimi, 2016).

Humankind has a long record of discovering and using a variety of natural and synthetic

materials in order to improve comfort and living conditions. With the taming of animals, the use

of woven items has increased. The carpets and rugs that we typically use today as floor

coverings were discovered as far back as 6,000 B.C.E. and were common in range of regions


3

across the globe such as Mongolia, Central Asia, Afghanistan, Persia, Egypt, Turkey, China,

India, Spain, Serbia, Bulgaria, England and France (Bcfca, 2018).

Today, a rug or carpet is defined as a decorative textile made of thick materials usually used as

a floor covering. It was traditionally made from wood, but since the twentieth century synthetic

fibers like polypropylene, nylon or polyester are often used (Eiland, 2018). There are different

types of carpets including tufted, woven, non-woven, flat weave, needle felt, velvet, knot, fiber

type, nylon, olefin, polyester, acrylic, wool, blend, pattern, etc. (Srivastava, 2016).

Carpet weaving is a small scale, labor-intensive industry that has created several employment

opportunities and has great potential to contribute to economic development. The hand-woven

carpet industry is a good source of income generation for many families, and especially for

women, in some developing countries such as Afghanistan and its neighbors (Sadhna, 2016).

The carpet Industry in Afghanistan provides excellent opportunities for people and it is one of

the major contributors to the economy. Carpet weaving is the second biggest industry in

Afghanistan after the agriculture sector and has created sources of income and the means of

livelihood for millions of Afghans. According to the Afghan Carpet Manufacturers and Exporters

Union, more than 1.5 million people work in the carpet weaving industry in the country and

produce nearly one million cubic meters of carpets on annual basis that are mostly exported

outside the country (1.5 Million people working in Afghanistan's carpet industry, 2014). An

Afghan rug or carpet is a type of hand-woven floor covering textile traditionally made in the

northern and western parts of Afghanistan by various ethnic groups, but mainly by Turkmens

(Afghan Carpet, 2018).

Different types of carpets can be found in Afghanistan such as Mawr, Qarqeen, Sawarqi,

Dawlatabadi, Andkhoyee, Aqchahee, Altibolak, Chobrang, Qazaq, Qotan, Shirwan, Adraskan,

Qalaizali, Qondozi, Khal Mohammadi, etc, which are primarily woven in Juzjan, Faryab, Balkh,

Qunduz, Herat, Farah, Badghis and Kabul provinces. Rugs and carpets weaving is common

among Turkmen tribes in northern Afghanistan, where it is not only an income generating

industry, but also an accepted cultural practice (Hafid, 2016).

Aqcha and Andkhoy districts are famous for their hand-woven carpets in the area. Aqcha is a

town in northern Afghanistan with an estimated population of 50,000 people. It is located 50

kilometers east of Sheberghan city and is well known for its traditional rugs and carpets,

especially the fil Pah (elephant foot) designs.

Andkhoy is also a town in northern Afghanistan and is a district of Faryab province. Its

population is estimated at 37,100 people. Carpet weavers in this district weave and supply

some of the most famous carpets in the area (Ahmadi, 2017).

The objective of this research paper is to explore Afghanistan’s carpet industry including its

contribution to Afghan households’ income and productivity. In order to address a problem, its

parameters first need to be introduced.


4

According to the Carpet Weavers’ Union in both districts, the contribution of handmade carpets

to household income is decreasing on a daily basis. This research investigates whether this

change is due to increased availability of the imported carpets or as a result of the increased

contribution of other sources to household income. To produce meaningful results, the following

research questions were developed:

1. Does carpet weaving provide a major source of income for the households sampled?

2. What factors influence carpet weaving production?

This study employs a linear regression approach to model the relationship between a

dependent variable and one or more independent variables.

(1)

Where:

Y is the dependent variable, a is the intercept, β is the coefficient, X is the explanatory variable

and μ is the error term. The linear regression here is used to estimate the impacts of earnings

from carpet weaving on the income level of the sampled households.

In addition, we use the Cobb-Douglas production function in this study to estimate and compare

the productivity of carpet weavers (labor) and tools used in production (capital) in the

abovementioned districts. In economics, the Cobb-Douglas production function is widely used to

present input-output relationships. It was proposed by Knut Wicksell (1851-1926) and tested

against statistical evidence by Charles Cobb and Paul Douglas in 1900-1928.

The basic equation is as follows:

Y= ALα Kβ (2)

Where:

Y indicates total production, L is the labor input, K is the capital input and A is the total factor of

productivity or is an efficiency parameter reflecting the level of technology. α and β are the

output elasticities of labor and capital, respectively. These values are constants determined by

the available technology.

In this study, a nonlinear relationship of the Cobb-Douglas production function is converted into

linear with appropriate transformations to fit within the framework of the classical regression

model. Here, this transformation has been demonstrated by taking up a multivariable extension

of the two-variable, log-linear models as following (Hossian & Islam, 2013):

ln(Y) = ln(A) + α ln(L) + β ln(K) (3)

Y = a + βX … + μ


5

Field Research Design and Methods of Data Collection

The collected primary data collected from the field research were designed as follows in order to

fit the desired statistical models explained above.

In the first part, to estimate the contribution of earnings from carpet weaving to total household

income, a multiple linear regression approach was used and the variables are defined as

follows:

(4)

Where:

Y = Total monthly income of household

a = Constant

X1 = Monthly earning from carpet weaving

X2 = Monthly earning from farming and livestock

X3 = Monthly earning from family business (shopkeeper)

X4 = Monthly earning from salary or wages

X5 = Monthly earning from remittance (Hawala)

μ = Error term

In this part, the dependent variable is the household income and is related to various sources.

Carpet weaving, farming and livestock, family businesses, salary and wages and remittances

are the independent variables through which we estimated the contribution of each explanatory

variable and, in particular, the earnings from carpet weaving to the household income

(Farahmand, 2017).

In the second part the Cobb-Douglas production function was used to estimate the productivity

of carpet weaving and to ascertain whether it is increasing, decreasing or providing constant

returns to scale.

Y = a + β1X1 + β2X2 + β3X3 + β4X4 + β5X5 + μ


6

Table 1. Definition of Variables in Cobb-Douglas Production Function

Variable Definition

1.1. Dependent variable

Y = Carpet production The amount/size of carpet woven in one month indicated in meters squared (m2)

1.2. Independent variables

L = Labor input Hours of labor spent to weave carpet in a day/month

K = capital input Number of handlooms plus the necessary equipment used with it (e.g. hook, comb, scissors)

A = Total factor productivity We assume it is constant and takes the value of 1

Source: Author

Results

According to the demographic analysis of the 200 sampled households in Aqcha and Andkhoy

districts, the average household has 11 members.

Data on the financial and employment status of the households shows that their average

monthly income is 18,435 Afghani (216 euros). Household can earn an average of 7,000

Afghani per month from weaving carpets.

Different sources form households’ total income, because the earnings from carpet weaving

alone is not enough to provide a livelihood. However, although individuals can weave an

average of 3.5 m2 of carpets per month, the main challenge is to sell these goods. The following

figure shows households’ different income sources.

37%

18%7%

17%

5%

16%

Figure 1. Househods' Income Sources

Carpet weaving

Farming & livestock

Family business

Salary/wages

Remittance

Other

Source: Author


7

Figure 1 shows that earnings from carpet weaving comprises only 37% of the households’ total

income. Most of the households depend on earnings from at least two sources and members

are eager to find new sources of income, since the demand for carpets has decreased

dramatically over the last few years, according to the study participants.

The number of weavers differs from family to family; ranging from a minimum of one to a

maximum of 13 who work seven hours per day on average. The payment to the weavers also

varies: in most cases, the weaver is a family member who receives no wage or salary. In the

case that the weaver is an outsider, he/she earns an average monthly salary of 8,000 Afghan. If

a household receives an order from a carpet dealer to weave a carpet, it would then earn a 30%

share of the carpet’s selling price. The selling price differs from carpet to carpet. For instance, a

one meter square carpet of the common design (Filpah) is sold for 900 Afghani, whereas a one

meter square carpet of the Biljek design is sold for up to 11,000 Afghani.

Almost all of the weavers in both districts use traditional wooden handlooms for weaving

carpets. However improved metallic looms are more efficient, but weavers cannot afford to buy

them. The average cost of a wooden handloom plus the necessary equipment to operate it (e.g.

hook, comb and scissors) is 5000 Afghani. The sampled households were also asked if they

received any kind of aid or training from the government or international organizations. The

primary response was no.

All household members including children take part in the carpet weaving process. The

following figure shows the percentage of household members involved in weaving carpets.

Men19%

Women57%

Children24%

Figure 2. Contribution of Family Members in Carpet Weaving

Source: Author


8

As the figure above shows, the proportion of women is higher than men and 24% of children

also take part in carpet weaving, which could be a separate case study of child labor issues.

We also asked the carpet weavers about the challenges they were facing. The following figure

shows the range of responses.

Figure 3 indicates that of the 193 households surveyed, 163 said no or low demand is the major

challenge they face in the sector. A total of 23 households reported that the lack of access to

international markets is the major problem. While five households highlighted the lack of raw

materials and only two households reported the lack of capital. None of the sampled

households selected labor force shortage as a challenge.

Regression Analysis:

To estimate the contribution of earnings from carpet weaving to the total household income, a

multiple linear regression was conducted. The following table shows the results of the

estimation.

0

20

40

60

80

100

120

140

160

180

Lack of capital No/low demand Lack of rawmaterial

Labor forceshortage

No access to int.markets

Figure 3. Challenges in the Carpet Sector

Source: Author


9

Table 2. Multiple Regression Estimation

Variable Coefficient Std. Error t-Statistic Prob.

C 4714.771 646.2794 7.295252 0.0000

Carpet weaving 0.862617 0.060557 14.24465 0.0000

Farming and livestock 0.821919 0.084463 9.731095 0.0000

Family business 0.871936 0.092492 9.427198 0.0000

Salary and wages 0.899419 0.046038 19.53646 0.0000

Remittance 0.783417 0.118898 6.588959 0.0000

R-squared 0.822715 Mean dependent var 18435.2

Adjusted R-squared 0.817974 S.D. dependent var 13141.9

S.E. of regression 5606.906 Akaike info criterion 20.132

Sum squared resid 5.88E+09 Schwarz criterion 20.2334

Log likelihood -1936.736 Hannan-Quinn criter. 20.1731

F-statistic 173.5592 Durbin-Watson stat 1.81234

Heteroskedasticity Test: Breusch-Pagan-Godfrey

Obs*R-squared 1.958918 Prob. Chi-Square(5) 0.8548

Source: Author

Table 2 shows that all of the independent variables have positive impacts on the dependent

variable of total income. This means that an increase of one Afghani in earnings from carpet

weaving can increase the total household income by 0.8 Afghani. The coefficient of remittance

and total income is smaller than the other variables. All of the variables are statistically

significant according to their probability value. The model explains an 82% variation according

to the adjusted R-square.

To ensure the homoskedasticity assumption of the multiple linear regressions, a

heteroskedasticity test among all independent variables was applied. The result of the test

showed that residuals are not heteroskedastic, because the probability value (0.85) is greater

than 5%.

In addition, to assess the productivity of inputs such as labor and capital in the carpet sector of

Aqcha and Andkhoy districts, a linear regression was run and analyzed based on the Cobb-

Douglas production function framework. We considered the monthly square meter output of

hand-woven carpets as the dependent variable (Q). Monthly working hours of the labor force (L)


10

and the number of handlooms (K) are the independent variables in this model. The following

table shows the results.

Table 3. Linear Regression Estimation

Variable Coefficient Std. Error t-Statistic Prob.

C -0.455526 0.821753 -

0.554335 0.58

Log (labor) 0.237286 0.155325 1.527674 0.1283

Log (capital) 0.937253 0.118442 7.913182 0.000

R-squared 0.268078 Mean dependent var 0.990432

Adjusted R-squared 0.260373 S.D. dependent var 0.726039

S.E. of regression 0.624405 Akaike info criterion 1.911386

Sum squared resid 74.07742 Schwarz criterion 1.962101

Log likelihood -181.4487 Hannan-Quinn criter. 1.931924

Heteroskedasticity Test: Breusch-Pagan-Godfrey

Obs*R-squared 5.289935 Prob. Chi-Square(2) 0.071

Source: Author

Table 3 shows that both working hours of the laborer and the number of handlooms used in

weaving carpets are positively correlated with the carpet output. The variable capital is

significant while the variable labor is insignificant according to the probability value shown

above. The R-square indicates that 26% of the variation of the output can be explained by the

explanatory variables.

To assess the correlation between the output and inputs, we added the coefficients of both

variables (0.237286 + 0.937253 = 1.174539) and according to the law of returns to scale (1.17 >

1), it is increasing returns to scale. This means that one additional input can increase the output

by more than one. To ensure the homoskedasticity assumption of the multiple linear

regressions, a heteroskedasticity test among two independent variables was applied. The result

of the test revealed that residuals are not heteroskedastic.


11

Discussion and Conclusion

This study empirically evaluates the income composition and productivity of hand-woven

carpets in Andkhoy and Aqcha districts, which are famous areas in Afghanistan’s carpet

weaving sector.

The sampled households earn their income from various sources such as carpets, farming,

livestock, family businesses, salary and wages and remittances. Earning from weaving and

selling carpets contributes a larger share of the total income than the other sources. The

majority of carpet weaving households earn their income from at least two sources. These

households can no longer depend solely on earnings from carpet weaving, since the demand

for their carpets has been dramatically decreasing over the past few years, according to the

perspectives of the participants

However, the hand-woven carpet industry is generally accepted as a labor-intensive sector, yet

the coefficient of capital was larger than the labor, according to the present study. The sum of

the estimated coefficient reveals 1.7, which is increasing returns to scale.

In total, 57% of the carpet weavers are women who are not paid for their work because they are

family members. Child labor was also observed during this study, as children comprised 24% of

the work force.

All sampled households in both districts use traditional wooden handlooms for weaving carpets.

Although improved metallic looms are better tools, they are not financially and technically able

to transform the sector. The carpet weavers have not received grants or training through

governmental or international organizations.

Comparing the two districts, the overall market condition is better in Aqcha than in Andkhoy,

The common challenge is low and decreasing demand and the lack of access to broader

markets.


12

References

1.5 Million people working in Afghanistan's carpet industry. (2014, 12 23). Retrieved July 24, 2018, from

Afghan Zariza: http://www.afghanzariza.com/2014/12/23/15-million-people-working-in-

afghanistans-carpet-industry-rue-government-apathy

Afghan Carpet. (2018). Retrieved July 24, 2018, from Encyclopedia Britannica :

https://www.britannica.com/art/Afghan-carpet

Ahmadi, M. A. (2017). Carpet Industry and its Role on Income Generation of Afghan Households. Juzjan

University, 9.

Bcfca. (2018). The History of Carpet. Retrieved July 23, 2018, from British Columbia Floor Covering

Association: http://www.bcfca.com/the-history-of-carpet.html

Eiland, M. L. (2018). Rug and Carpet. Encyclopedia Britannica .

Farahmand, E. (2017). The Contribution of Beekeeping Output to Household Income and Food Security.

Afghan Economic Society, 6.

Hafid, K. A. (2016). Carpet Weaving is an ancient Art of People in North Afghanistan. Retrieved July 30,

2018, from Majma:

http://old.acsf.af/index.php?option=com_content&view=article&id=751:2013-10-06-09-33-

01&catid=121&Itemid=12

Hossian, S., & Islam, N. (2013). Productivity Analysis and Measuring the Returns to Scale of

Manufacturing Firms in the South-West Region of Bangladesh. Journal Of Humanities And Social

Science, 71.

Nasrat, S., & Karimi, A. (2016). The Afghan Carpet Industry: Issues and Challenges. Economic

Alternatives(4), 475.

Sadhna. (2016, Dec). Role of Carpet Industry in Economic Growth of India. INTERNATIONAL JOURNAL

FOR INNOVATIVE RESEARCH IN MULTIDISCIPLINARY FIELD, 2(12), 197.

Srivastava, V. (2016). A STUDY ON HAND KNOTTED CARPET INDUSTRY. THE IIS UNIVERSITY, JAIPUR, pp.

6-13.

mohammad ehsan sadiq the contribution of carpet weaving to ... · production. in addition, the...

Documents