Geda, Alemayehu (Dr.)Arrefaine, Michael2021-03-302023-11-042021-03-302023-11-042004-06http://etd.aau.edu.et/handle/123456789/25794Most studies on the plant khat (catha ed uli s) -the mild stimulant cash crop- focus on description of the social behavior, health imp lications and psycho logical effects on consumers. Due to this most policy actions taken in this regard are one sided since they neglect the economic contribution of khat. The present study tried to describe the economic role of khat in Ethiopia. Graphs and tables are used fo r this purpose. Resu lts indicate that khat is clearly an important cash crop i.e. as a so urce of fore ign exchange, so urce of tax revenue to the government and creating employment opportunity both to the fanners and urban dwellers. Thus, it is recommended that policy makers should take into consideration the economic role of khat to understand the impact of alternative policy packages and/or extern al shocks that may have an effect on income/employment of individual khat producers and on the whole economy. The study also assesses the supply elastici ty of khat with respect to its own price and price of food crops (teff, wheat & maize) and coffee, so as to examine its relationship with food crops and coffee. Besides labor and fe rtili zer, non- price factors such as land and animal power are also included as explanatory variab les. The methodology applied, whi ch is firmly rooted in neo-class ical theory, deals with the est imation of profit (dual of the production jimction), supply and input demand funct ions; the parameters are mainly based on cross-farm var iation. A cross-section seco nd ary data from the 5th round of the Ethiopian Rural household Survey held in 1999 is used to present empirical estimates.enEconomic Analysis Of 'Khat'Thesis