Why Does Poverty Persist In Rural Ethiopia?
This paper seeks to address the question: why does poverty persist in rural Ethiopia? We argue that it is largely a lack of entitlements to fundamental livelihood assets which urges poor rural farmers into livelihood diversification to make a living. We base our findings on empirical work, which is based on information gathered from a three-round survey of 149 rural households in Ethiopia during 1999/2000 cropping season. The FGT poverty index is employed to examine the extent and severity of rural poverty and reveals that nearly 40% of the sample households live below poverty line with average poverty gap of 0.047. The binary logit estimates shed light on factors behind the persistence of poverty and indicates that rural poverty is strongly linked to entitlement failures to crucial assets such as land, human capital and oxen. The study also reveals that poor households attempt to smooth their consumption and income through livelihood diversification, among which petty trading, charcoal making and fuelwood gathering for sale, brewing and craftsmanship are the significant ones.
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- Stefan Dercon & Pramila Krishnan, 1998.
"Changes in Poverty in Rural Ethiopia 1989-1995: Measurement, Robustness Tests and Decomposition,"
Working Papers Department of Economics
ces9819, KU Leuven, Faculty of Economics and Business, Department of Economics.
- Stefan Dercon & Pramila Krishnan, 1998. "Changes in poverty in rural Ethiopia 1989-1995: measurement, robustness tests and decomposition," CSAE Working Paper Series 1998-07, Centre for the Study of African Economies, University of Oxford.
- Philippa Bevan & Sandra Fullerton Joireman, 1997. "The perils of measuring poverty: Identifying the 'poor' in rural Ethiopia," Oxford Development Studies, Taylor & Francis Journals, vol. 25(3), pages 315-343.
- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
- Ravallion, Martin & Bidani, Benu, 1994.
"How Robust Is a Poverty Profile?,"
World Bank Economic Review,
World Bank Group, vol. 8(1), pages 75-102, January.
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