Effect of Non-farm Income on Rural Household Livelihood: A Case Study of Moyale District Oromia Regional State, Ethiopia
The study attempts to investigate the link between household livelihood and nonfarm employment and income from nonfarm using the survey data collected from 170 systematically selected households from four villages of Moyale district, Oromia Regional state, Southern Ethiopia. Considering the objective of the study, given a household participated in nonfarm employments to generate income and the effect of generated income on household livelihood, Probit and Heckman selection model (two stage) are used respectively. To examine, first the household decision with respect to participation in nonfarm employment using probit model, the researcher found that age, family size, credit, livestock holding, education ,marital status , distance to market and main road are the most influencing variables in determining households to participate in nonfarm activities. Further , the effect of nonfarm income on rural household livelihood is examined. The study indicates that nonfarm employment provides additional income that enables farmers to spend more on their basic needs include: food, education, closing and health care. The result of the study implied that nonfarm income has a role which is significant in maintaining household livelihood and to change their living standard. In addition the result show that about 4.7% of sample households primary occupation is Nonfarm activities.
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