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The Dynamics of Poverty in Urban Ethiopia

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  • Gebremedhin, Tesfaye A.

Abstract

The paper examines poverty in urban Ethiopia using household survey data for 1994 and 2000. Consumption poverty is found to be high, with an overall head count of 47 per cent, in 1994, and 40 per cent, in 2000. As monetary measures may not appropriately capture welfare in non-monetary dimensions of life, non-monetary indicators, such as, subjective welfare status, nutritional status of children and housing characteristics are also examined. The findings indicate that there is a significant association between consumption poverty and subjective welfare status, but a weak agreement in ranking of households. Non poor households, in terms of consumption, are found to enjoy better housing amenities. However, the association between consumption poverty and child nutritional status is not strong. Poverty dynamics is also analysed using transition matrices and multivariate regression techniques. It was found that over 58 per cent of panel households had experienced poverty at least once during the period. Of these, over half had been chronically poor. The poverty transition was also quite significant with over a quarter of households experiencing a change in their poverty status. The results also showed that households with higher dependency ratio and whose heads are self employed, casual workers, pensioners and unemployed have a lower probability of exiting poverty. Those that are educated and belong to major ethnic groups have a higher probability of exit. Similar factors are significant in affecting the probability of entry.

Suggested Citation

  • Gebremedhin, Tesfaye A., 2006. "The Dynamics of Poverty in Urban Ethiopia," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139737, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare06:139737
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    File URL: http://purl.umn.edu/139737
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    References listed on IDEAS

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    1. Bigsten, Arne & Kebede, Bereket & Shimeles, Abebe & Taddesse, Mekonnen, 2003. "Growth and Poverty Reduction in Ethiopia: Evidence from Household Panel Surveys," World Development, Elsevier, vol. 31(1), pages 87-106, January.
    2. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
    3. Tesfaye Alemayehu Gebremedhin & Stephen Whelan, 2008. "Prices and Poverty in Urban Ethiopia 1," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 17(1), pages 1-33, January.
    4. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-1831, November.
    5. Mckay, Andrew & Lawson, David, 2003. "Assessing the Extent and Nature of Chronic Poverty in Low Income Countries: Issues and Evidence," World Development, Elsevier, vol. 31(3), pages 425-439, March.
    6. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    7. Dean Jolliffe & Anastassia Semykina, 2000. "Robust standard errors for the Foster-Greer-Thorbecke class of poverty indices," Stata Technical Bulletin, StataCorp LP, vol. 9(51).
    8. Stefan Dercon & Pramila Krishnan, 2000. "Vulnerability, seasonality and poverty in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 25-53.
    9. Ravallion, Martin & Lokshin, Michael, 1999. "Subjective economic welfare," Policy Research Working Paper Series 2106, The World Bank.
    10. Svedberg, Peter, 2000. "Poverty and Undernutrition: Theory, Measurement, and Policy," OUP Catalogue, Oxford University Press, number 9780198292685.
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