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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.


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