Abstract:
The aim of this study was to examine the determinants of income source choices in Gida ayana
district of western Oromia. This study assesses the determinants of livelihood choices of rural
Farm Households, the case of gida ayana disrtrict of western oromia. Descriptive statistics and
econometric models are used to analyze the data. Multinomial logit model was used to analyze
determinants of livelihood choices of rural Farm Households. The degree of income
diversification of rural farm households was found to be low. This implies that farm households
generate their incomes from few livelihood activities. Dependent variable, income source
choices/livelihood catagories (dummy) has four categories: only on-farm, on-farm+ off-farm, on farm+ non-farm and mixed of off-farm and non-farm. Descriptive result indicated that on-farm
activities share 50.22%, on-farm+ off-farm with share 9.96%, on-farm+ non-farm with share
17.75 % and mixed of off-farm and non-farm with share 9.96%. From multinomial logistic
regression Gender, marital status of house hold head, level of education household head, Labor
capacity of the household head, access to transportation, land size, access to irrigation, work
preference of household head, access to electricity and number of occupation of household head
significantly influanced involvement in to off-farm activities. Whereas involvement in income
diversification in non-farm activities was significantly influenced by marital status of house hold
head, education household head, Labor capacity of the household head, access to market,
household land size, employment, access to irrigation, work preference of household head,
access to electricity and number. The study result showed that despite the high level of
participation in non and off-farm activities, the contribution of non and off-farm income to total
household income is small compared to farm income.
But there is lack of transportation and well marketing system for diversifying their means of
livelihood
