In this paper attempt is made to explore the relationship between standard of living andrnsome demographic characteristics of rural households in Arssi region (now one of the zonesrnin Oromiya region), based on the 1981 /82 Rural Household Income Consumption andrnExpenditure Survey data. By taking household consumption expenditure as an indicator ofrnstandard of living, the thesis examines its association with household size, age composition ofrnmembers of the household, and age and sex of the head of the household . Furthermore labourrnforce participation level of house hold members in the working age group and schoolrnparticipation level of school-age household members are considered to see their associationrnwith the welfare of the household. Both approaches oflevel of welfare, relative standard ofrnliving and absolute poverty are employed in the study. Descriptive. bivariate and multivariaternstatistical methods of analysis are applied in the investigation.rnThe major findings of the study are: standard of living is negatively associated withrnhousehold size and dependency ratio . It is also non linearly associated with age of head of thernhousehold. Sex of the head of the household is not found to have significant relationship withrnstandard of living. School participation leve l ha s no relationship with standard of living whilernthe relationship between standard of living and labour force participation is un clear. Differencernin standard of living in the Awrajas of the region is found significant. Arbagugu was found tornbe the better off as compared to ChilaJo and Ticho. Compared to Arssi as a whole, Chilalo andrnTicho showed lower whereas Arbagugu showed higher standard of living. Although Chilalornis relatively developed in terms of infrastructure and social services, the standard of livingrnmeasured by household expenditure in thi s study indicated that Arbagugu to be the better offrnAwraja. One reason for this could be the higher population density in Chilalo than otherrnAwrajas, which might have resulted in relatively le sser land holding per household. However.rnthis requires further study and analysis.