This research aimed at analyzing livelihood diversification and its effect on poverty status of rural households in the Kamba district, southern Ethiopia. To achieve this objective, cross-sectional data were collected from 394 randomly selected households of the district. A two stage sampling technique was used to select representative sample respondents. The data were analyzed using Multidimensional Poverty Index (MPI) for poverty assessment; descriptive statistics and econometrics analysis. The survey result showed that 74% of the people were poor, these poor people were deprived in 51% of weighted indicators and the adjusted headcount MPI was 38%, respectively. The result of logistic regression model showed that among 12 explanatory variables included in the model, six of them were significant at less than 5% level of significance. From these variables, family size and total number of dependent individuals were positively correlated to poverty status, whereas farm size, number of livestock owned, education and livelihood diversification index negatively affected poverty status of the household in the study area. From policy perspective, livelihood diversification of households should be given more focus and attention by policy makers in efforts to reduce poverty status of the households.

Keywords: Livelihood diversification, Multidimensional poverty index, Logistic regression, Kamba woreda.