Different Indicators to Study Livelihood Systems
- Introduction
A livelihood system refers to the way individuals or households combine various assets, activities, and resources to make a living.
To study such systems effectively, indicators are used — these are quantifiable or observable measures that help assess the status, sustainability, and resilience of a livelihood.
Indicators allow researchers and policymakers to understand:
- How people earn their living
- The quality of their life
- The sustainability of their livelihood
- The effects of development programs or shocks (like climate change, market failures, etc.)
- Types of Livelihood Indicators
Livelihood indicators are generally grouped under five broad categories based on the Sustainable Livelihood Framework (SLF) by DFID (1999).
These are linked to the five livelihood capitals — Natural, Human, Social, Physical, and Financial.
a) Natural Capital Indicators
These indicators assess the availability, access, and quality of natural resources that people depend upon for their livelihoods.
|
Aspect |
Indicators |
|
Land resources |
Landholding size, ownership pattern, land fertility, land use pattern |
|
Water resources |
Access to irrigation, availability of potable water, groundwater level |
|
Forest and biodiversity |
Forest area accessible, dependence on forest products, biodiversity status |
|
Soil and environmental quality |
Soil organic matter, soil pH, erosion level, salinity, degradation |
|
Climate and weather |
Rainfall pattern, frequency of droughts/floods, temperature variability |
Interpretation: Higher access to and better management of natural resources → stronger livelihood base.
b) Human Capital Indicators: These indicators represent the skills, knowledge, health, and ability to work that enable people to pursue different livelihood strategies.
|
Aspect |
Indicators |
|
Education |
Literacy rate, level of schooling, vocational training |
|
Health |
Nutritional status, access to healthcare, morbidity rate |
|
Employment skills |
Technical skills, agricultural or non-farm expertise |
|
Labor availability |
Family labor size, dependency ratio |
|
Knowledge and awareness |
Awareness of modern technologies, extension services received |
Interpretation: Households with high human capital can adapt better to shocks and adopt new livelihood opportunities.
c) Social Capital Indicators: These indicators measure the social relationships, networks, norms, and institutions that influence people’s livelihood opportunities.
|
Aspect |
Indicators |
|
Group membership |
Participation in SHGs, cooperatives, farmers’ clubs |
|
Trust and cooperation |
Collective action, social cohesion, mutual help systems |
|
Institutional support |
Access to panchayat, NGOs, extension agencies |
|
Social inclusion |
Gender participation, caste/community equity |
|
Information flow |
Access to media, social networks, and advisory services |
Interpretation: Higher social capital enhances resource sharing, reduces vulnerability, and improves access to information and opportunities.
d) Physical Capital Indicators; These indicators assess infrastructure and physical assets that support production and livelihoods.
|
Aspect |
Indicators |
|
Housing |
Type of house (kutcha, pucca), access to sanitation and electricity |
|
Infrastructure |
Roads, transport facilities, irrigation systems |
|
Productive assets |
Farm machinery, livestock, tools, fishing nets |
|
Communication |
Mobile, internet, radio, television ownership |
|
Public utilities |
Access to schools, health centers, markets, storage facilities |
Interpretation: Better physical infrastructure enhances productivity, market access, and overall livelihood quality.
e) Financial Capital Indicators; These indicators focus on the financial resources and economic strength available to individuals or households.
|
Aspect |
Indicators |
|
Income and savings |
Annual income, savings rate, income diversification |
|
Credit access |
Institutional loan availability, microfinance participation |
|
Assets ownership |
Livestock, jewelry, land, vehicles |
|
Expenditure pattern |
Spending on food, education, health |
|
Economic security |
Insurance coverage, remittance inflows, debt level |
Interpretation: Stable and diversified income sources indicate financial resilience and reduced vulnerability to shocks.
3. Additional Indicators for Livelihood Analysis; Beyond the five capitals, researchers also use cross-cutting indicators to assess livelihood sustainability and resilience.
Livelihood Diversity Indicators
- Number of income-generating activities per household
- Share of income from agriculture, livestock, non-farm activities
- Employment days per year
Livelihood Sustainability Indicators
- Dependence on renewable vs. non-renewable resources
- Soil and water conservation practices
- Use of organic farming or integrated systems
- Adaptation to climate variability
Livelihood Security Indicators
- Food security (availability and stability of food supply)
- Nutritional adequacy
- Access to clean water and sanitation
- Reduction in migration due to livelihood stability
Vulnerability Indicators
- Exposure to natural disasters, price fluctuations, or crop failure
- Land fragmentation
- Unemployment or underemployment rate
- Access to coping mechanisms (insurance, credit, social support)
Gender and Equity Indicators
- Women’s participation in decision-making
- Access to property, income, and training
- Gender division of labor
- Wage equality and empowerment measures
- Quantitative and Qualitative Indicators
|
Type |
Examples |
Purpose |
|
Quantitative Indicators |
Land size, income level, number of livestock, education level |
For statistical comparison and trend analysis |
|
Qualitative Indicators |
Perception of well-being, social status, empowerment, satisfaction |
For understanding cultural and social aspects |
Both are essential — quantitative data shows what is happening; qualitative data explains why it happens.
- Indicator Frameworks Commonly Used
|
Framework |
Focus Area |
Examples of Use |
|
Sustainable Livelihood Framework (SLF) |
Five capitals and vulnerability context |
DFID, FAO livelihood studies |
|
Household Livelihood Security (HLS) |
Food, income, and health security |
CARE International |
|
Rural Livelihood Index (RLI) |
Composite index of rural welfare |
NITI Aayog, India |
|
Livelihood Vulnerability Index (LVI) |
Exposure, sensitivity, adaptive capacity |
Climate resilience research |
- Example: Indicators Used in Rural Livelihood Study
|
Dimension |
Specific Indicators |
Unit/Measure |
|
Economic |
Annual household income, asset value |
₹/year |
|
Social |
SHG membership, participation in Gram Sabha |
Yes/No |
|
Human |
Literacy rate, skill training received |
% |
|
Physical |
Access to irrigation, housing type |
% households |
|
Natural |
Land ownership, irrigation source |
ha |
|
Sustainability |
Use of organic manure, soil conservation practices |
% adopting |
- Importance of Livelihood Indicators
- Help identify strengths and weaknesses in livelihood systems
- Facilitate targeted interventions and poverty alleviation programs
- Measure impact of development projects (like NRLM, MGNREGA)
- Assist in policy formulation for sustainable rural and urban development
- Track progress toward SDGs (especially SDG 1 – No Poverty, SDG 2 – Zero Hunger, SDG 8 – Decent Work)
