Improved understanding of rural livelihoods is required to reduce rural poverty faster. To that end, this PhD study quantified rural livelihood dynamics emphasizing (i) the role of environmental resources use in helping rural households to escape poverty, (ii) development of a new approach for livelihood strategy clustering, (iii) assessment dynamics in rural livelihood strategies, and (iv) the effect of attrition on rural livelihood dynamics assessments. A wide range of quantitative methods were employed using a unique environmentally augmented panel dataset combined with tracking attrite households. Two groups of attrite households were identified: ‘movers’ (households that left their original location) and ‘non-movers’ (households that still resided in the same location but were not interviewed for different reasons). The findings revealed that (i) total environmental income had a limited role in lifting poor out poverty which could be due to restricted access to more remunerative environmental resources, (ii) the developed approach for livelihood clustering (combining household income and asset variables using regression models) outperform both existing income and asset approaches (iii) rural livelihood strategies were found to be highly dynamic: some households move upwards, some move downward, and the remaining persist in any of the livelihood strategies in the livelihood ladder, and (iv) even though attrition did not significantly affect rural livelihood dynamics estimates, ‘non-movers’ were more important than ‘movers’ to rural livelihood studies and the cost of tracking ‘non-movers’ were negligible relative to the cost of tracking ‘movers’. Hence, from the viewpoint of poverty reduction, the study recommends (i) access restrictions should be loosened in order to enhance the role of both forest and non-forest environmental resources towards poverty reduction, (ii) to reduce poverty faster, policies should enable households in low remunerative livelihood strategies to move to medium remunerative livelihood strategies/high remunerative livelihood strategies, while protecting households in high remunerative livelihood strategies and medium remunerative livelihood strategies from slipping into low remunerative livelihood strategies, (iii) the use of more of the livelihood characteristics of households ensure improved livelihood strategy identification and policy interventions and (iv) ‘non-movers’ should always be tracked in rural livelihood studies while the decision on whether to track ‘movers’ depend on the purpose of the study.