Rural livelihood diversification and agricultural household welfare in Ghana

Abstract

Sufficient time has elapsed since agricultural sector reforms got underway in Ghana and so this study examined how some selected proxies of the reforms have changed overtime and evaluated their relative importance in influencing rural livelihood diversification and household welfare. In doing this, data was pooled from the 1991/1992 and 2005/2006 Ghana Living Standards Survey (GLSS) and the endogenous switching regression technique was employed. Diversified households and less diversified households differed significantly in terms of variables related to household assets, markets and institutions. Both household welfare and rural non-farm diversification decisions are mostly driven by household assets including good health, education, and household age composition. Households who live in communities with access to fertilizers, public transports and local produce markets are more likely to engage in non-farm diversification and enjoy improved welfare. The importance of access to TV and radio as effective mass media tools in influencing household behavior is underscored in the analysis. Targeting interventions that enhance livelihood diversification would ultimately have a positive impact on household welfare.