Step 1: Representing the system
The boundary of the system is represented on the diagram as a rectangular box, within which the various components are drawn.
The system is the decision making unit, which is frequently, but not always, the household unit. There may be more than one type of household within a community and social differentiation should be considered prior to the drawing of the diagram. Households with different resource endowments may follow different livelihood strategies. The factors which are of crucial importance for differentiating between households are locally specific. Poverty focused research and development activities frequently consider wealth. In the Ghanaian case study the following factors were relevant:
- Land ownership and access
- Gender of the household head and composition of the individual members
- Age of household members