Using primary data collected from 462 farm households, this paper aims to examine the impact of income diversification on rural household food security in Ethiopia. A propensity score matching model was employed to analyze the impact of participation in both agriculture and non-agriculture activities on household food security. The results indicate that age, education level, household size, number of contacts with extension agents, and numbers of livestock in tropical livestock units have a significant effect on household participation in both agriculture and non-agriculture sources of income generation. The propensity score matching result suggested that participation in both agriculture and non-agriculture would increase the rural household food security status by 10.6% to 19.5%, mainly due to a positive effect of additional sources of income generation from non-agriculture activities as witnessed in present and past studies. Therefore, to make considerable improvement on the food security situation, there is need to promote and scale-up on-farm, off-farm and non-farm income-generating activities in rural areas to diversify income sources so as to improve food security status of the rural households in Ethiopia.
Keywords: Ethiopia; food security; income; propensity score matching; rural household.