Classification and Determinants of Rural Households Participation in Livelihood Diversification Strategies in West Gojjam Zone of Amhara region, northwest Ethiopia

Abstract

This study investigates the livelihood diversification strategies of rural households and the factors that determine their engagement in these strategies. The study employed Participatory Rural Appraisal (PRA), focus group discussion, and individual in-depth interviews to collect qualitative data. A multistage sampling procedure was used to collect quantitative data from 405 randomly selected rural households. Thematic and narration used for qualitative data analysis.
The quantitative data was analyzed using descriptive statistics and a Multivariate probit model. The findings revealed that purpose was a vital criterion in addition to sector, location, and function in classifying rural households' livelihood diversification strategies. Onfarm wealth-accumulation strategy, non-farm wealth-accumulation strategy, off-farm survival strategy, non-farm survival selfemployment strategy, and non-farm survival wage-employment strategy were categorized. The Multivariate Probit, used for analyzing non-mutually exclusive dependent variables, estimation revealed that male-headed households, commercialization, highland, and midland relative to lowland agro-ecology enhance the rural households' engagement in on-farm wealth- accumulation and nonfarm wealth-accumulation livelihood diversification strategies.
Landholding size, estimated value of farm and non-farm equipment, the estimated value of crop production increase participation in nonfarm wealth-accumulation livelihood diversification strategy while, livestock holding size increased participation in on-farm wealth accumulation livelihood diversification strategy. On the other hand, the higher the estimated value of farm and non-farm equipment, the estimated value of crop produced, livestock holding size, and commercialization are associated with the lower the likelihood of participation in off-farm survival, non-farm survival wageemployment, and non-farm survival self-employment livelihood diversification strategies. The findings imply resource endowment and commercialization increase rural households' involvement in wealth-accumulation livelihood diversification strategies. Therefore, policymakers need to focus on the most suitable ways of supporting classified livelihood diversification strategies, thereby enhancing linking agriculture commercialization and diversification of livelihood strategies that induce economic progress.