Livelihood diversification and greater non-farm income have been considered as useful mechanisms to propel growth, lower rural poverty and augment farm income in the developing countries. Little, however, is known about its im- plications for nutritional outcomes such as dietary diversity. This article con- tributes to the literature by investigating whether greater non-farm income helps in improving food consumption patterns and dietary diversity. Using a nationally representative panel data of rural India and an instrumental variable (IV) approach, we investigate this association and find that non-farm income increases expenditure on food products especially non-cereal prod- ucts, leading to greater household dietary diversity. This has crucial policy implications for nutrition transition and livelihood diversification, further contributing to the existing knowledge on agriculture-nutrition pathways.
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