Prices and Poverty in Urban Ethiopia
AbstractPoverty is an ongoing issue in Ethiopia. The identification of policy options to address the problem primarily requires that poverty be measured accurately. One of the most important ingredients in the measurement of poverty are prices. The magnitude of poverty is affected by how cost of living differences across time and regions are adjusted. This paper derives a set of price indices for Urban Ethiopia using data from four urban household surveys conducted in 1994, 1995, 1997, and 2000. The results show that the cities of Dire Dawa and Mekelle are the two most expensive cities, while Jimma and Bahir Dar are the least expensive. The findings also confirm that poverty is indeed high in urban Ethiopia with poverty head count of over 40 percent. Poverty estimates derived using country level consumer price indexes, which do not adjust for spatial cost of living differences, are misleading. But using poverty lines as deflators to account for price differences does not affect the poverty estimates obtained.
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Bibliographic InfoPaper provided by University of Sydney, School of Economics in its series Working Papers with number 5.
Date of creation: Apr 2005
Date of revision:
Poverty; Urban Ethiopia; Price indexes;
Other versions of this item:
- Gebremedhin, Tesfaye A. & Whelan, Stephen, 2005. "Prices and poverty in urban Ethiopia," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137920, Australian Agricultural and Resource Economics Society.
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