Poverty and Vulnerability Dynamics: Empirical Evidence from Smallholders in Northern Highlands of Ethiopia

This study is primarily intended to examine the dynamics and determinants of rural household poverty and vulnerability in Northern Highlands of Ethiopia. Besides, it compares the result of asset-based poverty measurement against the standard consumption-based approach between two purposively selected Peasant Associations (PAs) in the region. The data for this research emanated mainly from the Ethiopian Household Survey (ERHS). Substantial improvements in many of the measures of household’s welfare (in terms of selected data on assets, education and participation in development activities) have been observed over the study period. However, considerable proportion of households is found to be poor and vulnerable in both PAs. In addition, the trends of both measures have been found to vary between the peasant associations. Moreover, the consumption based approach shows lower poverty incidences in shumsheha in all the survey rounds compared to Yetemen contrary to the results of the PCA approach, which appears to second previous village studies. This indicates the limitation of the consumption based approach in accounting for over all changes in the wellbeing of households. The study also compared the different determining factors of poverty and vulnerability in the two PAs and important implications drawn from the results are discussed.