Diversify More or Less? Household Income Generation Strategies and Food Security in Rural Nigeria

Abstract

We provide new findings on rural livelihood diversification in Nigeria, using panel data from the Living Standards Measurement Study – Integrated Surveys on Agriculture (LSMS-ISA). To a large extent, the patterns and the implications of livelihood diversification have been analysed using cross sectional data and a narrow definition of food security in previous studies. In some cases, analysis has been conducted in the absence of shock experiences. We find that some results about the determinants of income diversification in cross sectional analysis also hold true in the panel data setting, while others are only revealed due to the panel nature of the data set. We find that the relationship between wealth and income diversification in rural Nigeria is best categorised as upward sloping with diminishing marginal effects rather than a U shape or an inverted U shape as found in previous studies. We also find that income diversification favours food accessibility, food availability, and food utilisation, and therefore resilience capacities overall. We do not find any evidence that income diversification mitigates or aggravates the impact of shocks, as shock experiences appear to negatively affect food security in spite of income diversification.

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No potential conflict of interest was reported by the authors.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

1. Food availability, food accessibility, and food utilisation are three interlinked dimensions of the food and nutrition status of a household. Food availability is a measure of the amount of food physically available for households. Household-level food accessibility is realised when a household has the opportunity to obtain sufficient food quantity and quality. In addition to the quantity of food, food utilisation also includes the quality of the diet. Food accessibility is a necessary but not a sufficient condition to ensure an adequate food and nutrition status while the realisation of food availability is a necessary but not sufficient condition for the realisation of food access (see Pieters, Guariso, & Vandeplas, 2013).

2. Note that the question in the survey only asked about international remittances, so we are unable to investigate the importance of domestic remittances.

3. The Herfindahl-Simpson index normalised by the number of activities compensates for the effect of evenness and dominance.

4. Note that the non-inclusion of the variable non-agricultural wealth and its square in Equation (3) does not necessarily reflect the use of these variables as exclusions restrictions. The non-inclusion of these variables in Equation (3) is meant to avoid a collinearity issue between non-agricultural wealth and diversification.

5. The coping strategy variables are highly correlated and imprecise when taken in isolation but more robust to measurement error and regional variation when taken together as a composite measure such as the RCSI.

6. The observed and the counterfactual groups are identified only on the basis of observable characteristics.

Additional information

Funding

The authors gratefully acknowledge funding support from the Structural Transformation of African Agriculture and Rural Spaces (STAARS) program, hosted by Cornell University and the African Development Bank, and funded by the CGIAR Research Program on Policies, Institutions and Markets through the International Food Policy Research Institute. Additional support was provided by the Partnership for Economic Policy (PEP) funded by the International Development Research Center (IDRC) and the Department for International Development (DFID) of the United Kingdom (UK Aid).