Livelihood Strategies in the Rural Kenyan Highlands

Abstract

The concept of a livelihood strategy has become central to development practice in recent years. Nonetheless, precise identification of livelihoods in quantitative data has remained methodologically elusive. This paper uses cluster analysis to operationalise the concept of livelihood strategies in household data, then uses the resulting strategy-specific income distributions to test whether outcome differences exist between livelihoods. Using data from Kenya’s central and western highlands, five distinct livelihood strategies that exhibit statistically significant differences in mean per capita incomes and stochastic dominance orderings that establish clear welfare rankings among livelihood strategies were identified. Multinomial regression analysis finds geographic, demographic and financial determinants of livelihood choice.