Determinants of Rural Livelihood Strategies: The Case of Rural Kebeles of Dire Dawa Administration

Abstract

This study investigates the push and pulls factors that influence rural households^, choice of livelihood strategies. The data for this study are obtained from a survey of 200 households’ selected using multi stages random and purposive sampling technique from rural areas of Dire Dawa Administration in the year 2010. Multinomial logit regression was applied to identify the determinants of rural livelihood strategies followed by the rural household heads. Descriptive results addressed the economic status and livelihood strategies practiced by rural households.  Out of the total sample household heads about 39 % of the total household income was derived from agriculture only, 25% from a combination of agriculture and nonfarm, 17.5% from a combination of agriculture, non-farm and off-farm and 10.5% from a combination of agriculture and off-farm activities. The multinomial logit analysis revealed that family size, safety net, age of household head, sex and distance to the market were theoretically consistent and statistically significant effect to the likelihood choice of livelihood diversification, while livestock holding, farming system and dependence ratio, were partially contrary to the expectation. Livestock holding, family size, farming system, safety net, and dependency ratio were positively and significantly related at 1% to agriculture plus off-farm, at 5% to agriculture plus non-farm and at 1% to agriculture plus non-farm plus off-farm, at 1% to agriculture plus non-farm plus off-farm and at 5% off-farm plus non-farm, 1% to agriculture plus non-farm plus off-farm and at 5% probability level to off-farm and non-farm livelihood strategy respectively. In contrary, age of household head, sex, distance to the market, livestock holding, farming system and dependency ratio were negatively significant at 10% agriculture plus off-farm,10% to agriculture plus non-farm plus off-farm,1% to agriculture plus off-farm,1% agriculture plus non-farm plus off-farm, 5% to agriculture plus off-farm and 1% probability level to agriculture plus off-farm livelihood strategy respectively. The findings of the study suggest that efforts should focus on the promotion of options, substitution between assets and activities to diversify household specific agriculture-linked non-farm and off farm livelihood rather than focusing on the single agricultural productive farm by taking action to improve information, mobility and asset accumulation.

Keywords: determinants, Dire Dawa, livelihood strategies, rural