article · Cogent Economics & Finance
This research assesses how livelihood diversification influences food security among rural and town households in Ethiopia. Using balanced panel data from the Ethiopian living standard measurement survey covering 3,729 nationally representative samples, the study tracks shifts over time using the Simpson diversification index and random effect logit modelling. The analysis demonstrates that household size, female household heads, and greater distance to markets positively and significantly raise the likelihood of diversifying livelihoods. Conversely, older household head age, rural location, distance to main roads, access to credit, receiving assistance, and exposure to shocks significantly reduce diversification probabilities. Notably, households that faced shocks alongside livelihood diversification experienced lower food security compared to those diversifying without shocks, highlighting the critical interplay between external vulnerabilities and livelihood strategies.
Understanding how families manage income generation informs interventions to reduce poverty and hunger. Because shocks undermine the benefits of livelihood diversification on food security, policy programmes must design resilience strategies that do more than simply encourage multiple income sources, ensuring that household support effectively addresses underlying vulnerabilities.
The findings can inform public agencies, development organisations, and microfinance providers designing economic resilience programmes and targeted financial services for vulnerable communities. As an empirical socio-economic study based on survey analysis, it represents early-stage decision-support evidence rather than a market-ready product or technology.
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AbstractLivelihood diversification is relevant in poverty reduction, improve food security and a means of coping mechanism and risk management for survival of households. The research intended to examine the dynamics of livelihood diversification and food security over time, investigate the determinant factors of participation rate among household heads on livelihood diversification and to examine its effect on food security of rural and town households of Ethiopia based on the secondary data of Ethiopia living standard measurement survey. Balanced panel data employed enclosing a total 3729 samples representing national level of Ethiopia. The study used the descriptive analysis, Simpson diversification index and random effect logit model. Dynamics of livelihood diversification and food security observed over time. The random logistic regression model revealed that, household size, gender (female) and distance to market affect the livelihood diversification positively & significantly. Whereas, Age of household head, location (rural), distance to main road, credit access, assistance and experience of shocks influenced the probability of livelihood diversification negatively and significantly. Households who experienced shock and engaged in diversified livelihood have lower food security than being a diversified alone. Policy makers and other stakeholders need to integrate on implementations of livelihood strategies to improve food security, building resilience and vibrant economy.
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DOI: 10.1080/23322039.2024.2345304
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