Understanding livelihood strategy-poverty links: empirical evidence from central highlands of Ethiopia

Abstract

The aim of this paper is to disclose livelihood strategy-poverty links and gain a better understanding by developing typologies of rural households. Based on qualitative and quantitative data, we group households into different typologies and explore interactions. We identified six main agronomic strategies, four dominant livelihood diversification strategies, and income quartiles (proxies for poverty) using cluster and principal component factor analysis. We found that nearly 82% of the surveyed farmers in the study area belong to the bottom income quartiles while about 18% are on the upper quartiles. Households in the bottom income quartiles engaged in casual off-farm work and cereal-dominated livelihood strategies that tend to pursue subsistence farming by growing cereals and oil crops. Contrarily, farmers in the upper income quartiles adapted intensive agronomic strategies by integrating root crops, legumes, and vegetables with livestock. This was largely attributed to access to key livelihood assets such as land, livestock, education, and institutional support in which the upper quartiles were more endowed. Improving availability of the key assets for the bottom income quartiles might be a way out of poverty and ensuring sustainable development. It is crucial to recognize local-level heterogeneities of rural households when targeting development interventions.