Rural Household Poverty and Its Determining Factors. A Poverty Analysis Using Alternative Measurement Approaches

Melaku Yigzaw

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Master's Thesis from the year 2016 in the subject Sociology - Individual, Groups, Society, grade: Excellent, , course: MSc. in Dev...

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Master's Thesis from the year 2016 in the subject Sociology - Individual, Groups, Society, grade: Excellent, , course: MSc. in Development Economics, language: English, abstract: In developing countries like Ethiopia, our day-to-day formal and informal discourses are rarely out of poverty issues that can be linked directly or indirectly. Despite the determined effort of government and development agencies to reduce poverty and ensure sustainable development, poverty remains an everlasting challenge of the world. This study aims to examine rural household poverty and its determining factors using alternative poverty measurement approaches, in case of Gozamin Woreda, East Gojjam Zone of Amhara Region. It used both objective and subjective based poverty analysis approaches, where the survey based analysis and PPA of the study depend on randomly selected 242 and 42 sample households respectively. Using cost of basic needs approach (CBN), the poverty line of the study area is estimated as 19.16 Birr per day per adult equivalent. The study engaged Foster, Greer and Thorbecke (FGT) group of poverty measures to assess the incidence, depth and intensity of poverty and decompositions were made across sample Kebeles and socio-economic variables. OLS, logit and censored (Tobit) regression models were also applied to identify determining factors of household consumption expenditure, poverty incidence, depth and severity. PPA findings revealed that, perception of the community towards poverty is beyond the conventional, income/consumption based definition. Therefore, development policies and poverty reduction strategies should respond to rapid rural population growth. Moreover, Dega agro-ecological areas need particular attention all the way through poverty reduction efforts.