This study reviews the cases of income sources diversification in developing
countries and concluded with empirical evidence from Edo state, Nigeria. It
shows that non farm income as share of total income in Africa and Latin America
was 43%, while it was 51% for Asia. The empirical evidence from Edo
state in Nigeria indicates that 46% of the people have a well diversified portfolio.
The evidence from Edo state shows that the major sources of income in
Edo state are wages and salary (33%), rent from assets (33%), sales of farm
produce (14%) and trading (7%). It also indicates that income increases with
level of education, with Junior Secondary school education being the lowest
and First degree being the highest. The empirical evidence also indicates generally
that income increases with increase in number of income sources and
five income sources being the optimum that gives the highest mean income.
The regression analysis shows that income sources diversification, education
and location are positive and significant determinants of income, while gender
has non-significant relationship with income in Edo state. These findings suggest
that the increase in opportunity for people to diversify their income base
will increase their household income. Those opportunities were recommended
in this paper.