Human Resource Economics

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Factors Governing Enrollment and Public Expenditure on Education in Ethiopia
(Addis Ababa University, 1996-06) Awol, Elias; Bedri, Abdulhamid (PhD)
An effort is made to identify and determine the effects of the economic and demographic factors that influence the rapid growth of the educational system in Ethiopia. In doing this, the paper reviews the theoretical and empirical arguments for the rapid investment on education in the world. The analytical model constructed by Schultz (1985) to address the same problem is used. The model enables us to determine the effect of the factors identified to influence the growth of the system, in production-demand framework as constraints and conditions affecting the costs of, and demands for educational services. In the empirical estimation per capita income per adult, relative price of teachers, relative size of school age population and proportion of urban population are identified as the major factors governing the growth of the system. It is found out that the moderately growing income per adult, the decreasing relative price of teachers and the constantly growing urbanization significantly contributed to the growth of public expenditure on education. The rapidly growing school-age population squeezed and constrained the growth of public expenditure. On the other hand, from the components underlying this expenditure per school child, it is seen that the rapidly increasing enrolment with decreasing expenditure per student was made possible by; the relative substitution of physical resources by human resources and the absolute depreciation of physical resource intensity per student. In addition to these, the effect of economic and demographic factors on expenditure per school child by school levels and on the enrolment rates of males and females are also discussed. Finally, the implications of these findings on the existing education system of the country are also analyzed.
Determinants of Female Labour Force Participation in Urban Ethiopia
(A.A.U, 1996-06) Antenhe, Amsaya; M. Warner, James (Dr.)
Although wage labour opportunities are scarce for both mean and women in Ethiopia, female participation rates remain lower than. male participation rates and females are dis-proportionately concentrated in certain occupations of the labour force . Indeed, the participation of women in all aspects of the development process is very limited. However, little is known about the factors which are responsible for such a low level of female employment in Ethiopia . To this end, this study was designed to examine the determinants of female labour force participation in urban Ethiopia using data from the 1994 Urban Household Survey. The following methodologies are employed in this study. Different estimation methods (descriptive statistics, the logit and the probit models) are used to estimate the coefficients with respect to age, education, fertility, migration status marital status, and income of household head. It is found that female lab our force participation is positively related to age, education, and migration status , where as it was negatively associated with fertility, marital status , and income of the household head. Moreover, the analysis of the determinants of Female labour force participation which employs both log it and Probit models identifies age, fertility, marital status, migration status and education as the most important Factors responsible for the low level of female participation In the work force in urban Ethiopia. Based on the findings, the study recommends that extensive Family planning programmers are necessary in. order to increase the educational status of women by releasing women from Household responsibilities associated with child bearing.
The Impact of Education on Allocative and Technical Efficiency of Farmers: The Case of Ethiopian Small Holders
(A.A.U, 1997-06) Asfaw, Abay; Admassie, Assefa (Dr.)
With the growing interest in human capital theory, analyzing the impact of education on efficiency has been given special emphasis. this study first testes the celebrated hypothesis that 'traditional farmers are efficient but poor'. the result of the stochastic profit frontier function does not support this hypothesis in the Ethiopian case. the result shows that there are considerable amount of deviations from the optimal profit efficiency level. it specifically shows that the mean level of profit efficiency in the sampled fanners is 54.0 percent. this implies that there is 46.0 percent profit inefficiency in the sampled farmers. next it is tried to test the hypothesis of equal allocative and technical efficiency of educated and illiterate farmers by using the modified Y-L profit function model under various linear restrictions. the results reveal that educated farmers are relatively and absolutely more efficient than illiterate fanners. this implies that at the existing level of factor endowments and technology there is a potential to increase agricultural output by expanding education and consequently by making illiterate farmers to operate closer to the efficiency level achieved by their educated neighbors. It is also shown that education increases not only the efficiency of farmers but also the probability of farmers to adopt improved inputs such as fertilizer. the multinomial probit analysis also shows that education and environment variables are substitutes in modem areas and complementary in traditional environments. this suggests that expansion of schools and increasing enrollment rates in rural areas have higher payoff than in modem areas at least in increasing the probability of farmers to adopt fertilizer input.
Human Resource Development and Economic Growth in Ethiopia
(A.A.U, 1997-06) Walelign, Netsanet; Bedri, Abdulhamid (Dr)
Human resources development has long been considered an important factor in economic growth. This study examines the contribution of human resources in Ethiopia's economic growth. This is accomplished by entering education and nutrition (as proxies for human resources development) apart from physical capital and labor in the growth equation by taking the 28 years time period from 1967/68 to 1994/95. A long run static and a short run dynamic (error correction) models are employed to observe the contribution of human resources. The results obtained indicate that in the period under reference education enters positively and significantly whereas nutrition enters positively but insignificantly in explaining the growth in output.
Returns to Education and Male-Female Wage Differential in Ethiopia: An Analysis of Urban Household Survey
(A.A.U, 1998-05) Alebachew, . Abebe; Yoseph, Getachew ( Ato)
The main objectives of this study are to estimate and analyse the private returns to education and to look into the existence of gender discrimination in the Ethiopian Lab our Market. The methodologies used to that end are the OLS, the Heckman's two-step and the MLE two-step Procedures. The main findings of the study are the following . Educational investment is paying to an individual. One year of additional schooling, primary, secondary and higher education is found to have a return of 10, 5, 10.6 and 31 percent respectively. These estimates show that the private return to primary education is the lowest. No significant difference is observed between the private returns to males and females indicating that the existing disparity in enrolments is not explained by returns to education. Family background in the form of maternal education has been found to have significant impact on chldren's earnings implying that females' education has trans generational effect. The observed wage differential in the Ethiopian Labour Market is mostly explained by differences in productivity enhancing attributes rather than by discrimination. There are important policy implications to be drawn. Mere expansion of primary education may not result in improving the living standards and efforts should be made to revitalise its quality and relevance to the world of work. The government's intention to introduce costs haring arrangements at higher education is an optimal policy response to existing economic incentives. Improving female enrolments not only will reduce the wage differential between males and females but will also have a long-run economic benefit. So, resources should be committed to that end.
Social Security and Labour Supply in Ethiopia
(A.A.U, 1998-05) Don, Melaku; Mulat, Teshome
This Paper attempts to see the effect of social security on labor supply using traditional labor force participation model application of a log it regression to the survey data yields results that go counter to theory. the availability of Pension income does not reduce labor force participation rates. it is also Found. That as age increases, Participation in the labor force is significantly reduced for women than men and. Also for blue collar jobs than white collar ones. This result has a Policy implication that there is a need for retirement age discrimination act by sex and by type of job. Legit models were ,Estimated for different age groups and it is found that there is no problem that arises due to aging or health, Which are the main determinants in setting a retirement age, Until age 60 to participate in the labor Force it is also found that the Probability to participate in the labor force reduces by 0.09 if one goes from age group of 56-60 to the age group of 61-65.
Female and Male Wage Differentials in Addis Ababa a Case Study in Four Factories
(A.A.U, 1998-06) Haile, Tsehay; Aredo, Dejene (Dr)
In this study we used two methods to. estimate the extent of labor our market discrimination. The sample is taken from four factories in Addis Ababa. The first method is descriptive statistics, which estimate whether there is wage difference between female and male. The findings of the study indicate that there is wage difference, which is mainly attributable to difference in relevant variables and to a lesser extent due to sex difference. Consistent with the above result the second method, i.e., Oaxaca (1973) and Oaxaca- Ransom (1994) also indicated the existence of wage difference. This method decomposes log of monthly gross wage differentials Into labor market discrimination, the cause of which is difference in sex, and difference in relevant ones. In method of Oaxaca (1973) using female wage as a base, labor market discrimination is found to be higher . while using male wage as a base the difference between relevant variables caused larger parts of wage differentials. In method of Oaxaca -Ransom (1994) the difference between relevant variables caused larger parts of wage differentials. Both descriptive and wage decomposition indicate the existence of wage difference. The majority part of this difference is explained in both methods by relevant variable difference.
Education, Training and Agricultural Technology Adoption in Resource Poor Areas of North Wollo: The Case of Meket Woreda
(A.A.U, 1999-06) Tassew, Mulugeta; Demeke, Mulat (Dr)
Inspite of its important contribution to the Ethiopian economy at large, the performance of agriculture was disappointing for decades. Cognizant of this fact, Ethiopia is now implementing Agricultural Development-Led Industrialization (ADLI) strategy which concentrates on accelerating growth through disseminating better performing crop and livestock technologies to farm households. Differences on how quickly producers adopt such technologies can be explained by differences in human capital and differences in knowledge of the new technology. Having this idea in mind, a field survey was conducted in one of the resource poor areas of north wollo (Meket Woreda) to identify the factors that influence the use of improved crop technologies and ownership of livestock particularly cow and sheep among farmers in the woreda. This being the general aim of the Study, the chief objective was to see the impact of human capital variables on the adoption of these technologies. To this end, the probit model was fitted on primary cross sectional data collected from 144 farm households. An attempt is also made to see whether or not crop technologies are profitable or not by calculating the so called value cost ratio. The result obtained from the estimated models showed that the education level of household head, family size, participation in agricultural training programs and farm income significantly affect the adoption of fertilizer and/or improved seeds (Crop technologies). On the other hand, cow ownership is found to be influenced by total cultivated land, farm income and access to livestock credit. Similarly, sheep ownership is influenced by total cultivated land, age of household head, distance from main road and agro-climatic condition. The calculated value cost ratio indicated that income from barley production can be tripled if farmers apply the recommended rate of fertilizer on a hectar of land sawn with local variety of barley. Similarly, wheat production can be doubled if improved seed is mixed with fertilizer. Policies recommended from the findings of the study include infrastructual development dealing with education, strengthening agricultural training programmes and research activities and provision of livestock credit particularly to resource poor farmers. It is hoped that, such types of government action would improve agricultural production of the country in general and of the study area in particular.
Economic Analysis of Social Networks: Empirical Study on Selected Women Iddir in Addis Ababa
(A.A.U, 2000-06) Lemma, Teigist; Seyoum, Alemayehu (Dr)
By describing and singling out the economic features of Women Iddir, the study attempts to review and associate the literature on in formal insurance and social capital. It provides a framework of theoretical analysis and empirical results based on descriptive as well as econometric methods. The study brought out the uninterrupted social welfare service of Women Iddir that existed for about 60 years. Besides demonstrating its effective informal insurance service in Ethiopia, it reveals that age, education, premium and economic rational significantly explain the demand for funeral cover. Financial capacity and social rational influence efficiency of networks positively while reciprocity and membership to other forms of networks induce negative effect. Results indicate the existence of certain optimal level of informal insurance purchase by a risk averse person. It is found reasonable to discern that certain level of explicit and implicit economic rationale exist behind Women lddir that mostly are considered as altruistic, traditional, humanitarian, welfare, etc. Although networks are incepted in social and moral contexts, their resource base, welfare services and functions provide adequate justification to consider them as economic institution. Their informal nature and sustained service is the result of using mixed (non pure) strategies based on best alternatives, which are partial contract, partial economic rational and with strong reciprocal exchange and social objective. The exposure to non-home activities and recognition of wide range of risks enabled women to broaden the informal insurance cover. The non-marketable and efficient service offered by Women Tddir makes the potential of its substitutability far reaching. Instead, it has developed great potential to diversify the social welfare services if technical, material and financial backing is availed for them to develop and assume larger societal responsibilities. In spite of their own institutional development, recognition of Women Tddir's informal insurance/social welfare services deserves accounting their economic role in the society. Thus, studies on consumption and expenditure need to account their role in the households' economy and provide information for planning.
Households’ Willingness to Pay for Improved Solid Waste Management: The Case of Addis Ababa
(Addis Ababa University, 2002-06) Amiga, Aklilu
The supply of solid waste management service has always been the major environmental problem for the city of Addis Ababa. The introduction of service charges in the area of solid waste management is getting much attention due to continuous financial shortage of the city government to provide this service at an acceptable level. The pricing of this service is believed to bring efficiency and sustainability in this area. In line with this, this study was undertaken to examine the extent of solid waste management problem and households’ willingness to pay for improved solid waste management services. The contingent valuation method (CVM) is used to analyze households’ willingness to pay. For this 430 randomly selected households were used. The probit and tobit models are used for the empirical analysis. The result shows that 33.98% of households in Addis Ababa are practicing illegal dumping, i.e., disposing solid waste in an open-space, street or in to rivers. Only 54.86% of households are getting solid waste collection services. As a result the vast majority of households (91.02%) are not satisfied with what the city government is doing in this area. Most households (91.02%) are willing to cooperate with the government in financing solid waste management in order to improve this condition. The mean monthly willingness to pay is Birr 7.07 per household. It shows variation arcos different income group areas with 2.96 Birr /month for low, 7.76 Birr /Month for middle and 13.07 Birr /month for high income areas. The tobit model shows income, time spent in the area, quantity of waste generated, responsibility of solid waste management, education, house ownership, number of children and age to be significant variables in explaining maximum willingness to pay. While in the probit model income, age, number of children, time spent in the area, quantity of waste generated and education have significant effect on willingness to pay. The result of this study suggests there is a good chance of success if solid waste collection service charges are introduced. And these charges should take into consideration both ability and willingness to pay. This research has also identified the need to do research on the feasibility (both technical and economic) of other final disposal methods in addition to landfilling and the nature and volume of solid waste in Addis Ababa
Returns to Schooling in Non-Farm Self-Employment (The Case of Selected Urban Centers in Ethiopia)
(Addis Ababa University, 2002-07) Ejigu, Bisrat; Yoseph, Getachew (PhD)
Investment in human capital has long stirred an interest geared towards investigating whether or not it is profitable. Among such human capital variables, education has been recognized as the most important investment in human capital for a long time. The main objective of this study is to examine and estimate the returns to schooling in connection with self-employment in selected urban centers in Ethiopia. Using a Mincerian earning function and correcting for sample selection bias, the paper shows that (a) the private average returns to a one-year increase in schooling is about 5.6%. This figure is smaller than the global average (as estimate by Psacharopolous, 1993) by 5.4% and even by 9.4% from the average of some developing countries. This could partially be explained by the overall low quality of education in Ethiopia; (b) the Mincerian rates of return to primary, secondary and higher education are 6.9%, 7.9% and 17.2%, respectively. As is apparent from these coefficients, the highest return is derived from higher education and the lowest return for primary education. This indicates the existence of substantial productivity differential between college graduates and those who comes from the lower level of education; (c) educating females is marginally more profitable than educating males. This implies that expanding the provision of school places to cover women is not only equitable but also economically efficient as well; (d) the coefficient of start-up capital in the earning equation is positive and significant. It indicates that those household heads who put higher start-up capital earn more than others. The coefficient of dummy for service sector is also positive and significant. This implies that those household heads who run their business in the service sector earn more than others
Financing Higher Education in Kenya: The Case of Student Loans
(Addis Ababa University, 2003-05) Owino, Elizabeth; Mulat, Teshome (Prof)
Student loans have become increasingly important in the financing of higher education in developing countries. The objectives of this study are; i) to analyze the performance of the student loan scheme in Kenya, ii) to find out the characteristics of the beneficiaries and iii) determine the extent of government subsidy to the programme. The data used was extracted from records of the loans board and loan application forms. The methods of analysis were adapted from Albrecht and Ziderman (1995) for the calculation of the subsidy and loss to government, and Scott Long (1997) for the multinomial logistic estimation of the bursary and loan award determinants. Analysis for the determinants of loan and bursary award was done in two parts. The first part employed simple cross tabulation while the second part involved regression analysis. The results of the estimation indicated that region, income, expenditure, family status (orphaned) and number of siblings were significant in explaining the variations in amount of loan and/or bursary that a student would be awarded. Other important variables were residence (rural or urban) and father’s education. The challenges to the management of the loan scheme include addressing issues of equity and efficiency in funding universities, enhancing cost recovery and tapping of additional financial sources other than the government. A number of policy recommendations arise from the conclusions. First, resources should be directed to the most important fields of study. Second, students from the urban poor should be given equal consideration as those from the rural areas in accessing funds for higher education. Third, policies that encourage female students to enroll in the traditionally male-dominated courses must be implemented to promote equity. Fourth, the means testing mechanism should be tightened to ensure that only those who deserve loans and bursaries benefit. Lastly, financial assistance should be strictly directed to the most needy students.
The Impacts of Demographic and Economic Variables on the Rural Household Decision of Children Primary Schooling: Evidence from Four Kebeles around Bako Town in West Shoa Zone
(A.A.U, 2005-07) Dandena, Kumsa; Mulat, Teshome (Professor)
Under a given education supply, household demand for child schooling is very important. Particularly, in rural areas where the child work contribution is commonly high, investigating the impacts of demographic and economic variables enable to understand the demand side determinants of schooling for males and females in detail. This paper investigates the primary schooling of 455 children of ages 7 to 18 years from 155 randomly selected households in four Kebeles around Bako Tow in April 2004. The central assumption is that child work - increasing household resources slow down schooling and vice versa in missing markets. The pro bit estimates of the reduced form schooling equation show greater systematic determination by the observed household characteristics for females than they do for males in general. This indicates greater effective choice between work and schooling for the former. On the other hand, there is no statistically different gender disparity in rates of schooling. This calls for further socio logical investigations to find out why a number of male children are out of school. Next, with too meager incidence of paid work, especially for the children who are too young to be employed on international standard, the violation of child rights, in terms of right to primary education, is found to be associated with household workloads for female children. Whether excessive work compounds the problem in terms of health and psychological influences should be a future research agenda in order to reveal the incidence of the unacceptable forms of child labor. With regard to age categories as could be expected, there are distinct degrees of systematic relationships between child schooling and most variables as we move across age groups. Therefore, interventions that are meant to increase child schooling have to be aware of such differential responses across sex and age categories.
Determinants of the Nutrition and Health Status of Children in Rural Ethiopia: A Longitudinal Analysis
(Addis Ababa University, 2006-07) Ayalew, Daniel; Woldehanna, Tassew (PhD)
This study tried to see the determinants of nutritional status of children using longitudinal data from fifteen villages of rural Ethiopia. An attempt was also made to see if there are any significant interactions between mother’s education and community characteristics. By employing random effects procedure, both height-for-age and weight-for-height z-scores were regressed on various private and public determinants. The results show that age of the child, parental height and primary education, existence of permanent partner to the household head, household size and composition, and safe water source of the household are an important determinants of child nutritional outcomes. However, most of the interaction terms between mother’s education and community variables (such as access to healthcare and the communities’ safe source of water) failed to be significant implying partly the unimportance of these community variables and partly the low level of maternal education in the sampled households. But for the significant term in the WHZ regression (i.e the interaction between access to health care and mother’s attainment of at least a year of primary education but not higher), one may argue that having at least a year of primary education is a substitute to access to health care
Determinants of the Nutrition and Health Status of Children in Rural Ethiopia: A Longitudinal Analysis
(A.A.U, 2006-07) Ayalew, Daniel; Woldehanna, Tassew (Dr.)
This study tried to see the determinants of nutritional status of children using longitudinal data from fifteen villages of rural Ethiopia. An attempt was also made to see if there are any significant interactions between mother's education and community characteristics. By employing random effects procedure, both height-for-age and weight for- height z-scores were regressed on various private and public determinants The results show that age of the child, parental height and primary education, existence of permanent partner to the household head, household size and composition, and safe water source of the household are an important determinants of child nutritional outcomes. However, most of the interaction terms between mother's education and community variables (such as access to healthcare and the communities' safe source of water) failed to be significant implying partly the unimportance of these community variables and partly the low level of maternal education in the sampled households. But for the significant term in the WHZ regression (i.e the interaction between access to health care and mother's attainment of at least a year of primary education but not higher), one may argue that having at least a year of primary education is a substitute to access to health care.
Valuing the Benefits of Improved Lake Quality: An Application of Choice Experiment to the Case of Lake Awasa
(A.A.U, 2006-07) G.selassie, Girma; Yesuf, Mahmud(Dr.)
The Lake environment provides many goods and services depending on the different attributes of the surrounding environment. In this paper, we identified, among other things three attributes, i.e. , two environmental attributes (Tilapia fish stock, Surrounding forest cover) and one monetary attribute (fishing permit). We, Carry out a Choice experiment among fishermen of Awassa Lake to estimate the value of improvement of the lake quality in general in terms of the attributes selected. We analyzed the data using Multinomial logit model and derive important issues concerning the preferences of fishermen of Lake Awassa. Results confirm that fishermen of Awassa Lake have high levels of environmental concern and are willing to pay for the improvement of the lake environment in terms of the attributes selected in the Choice experiment. According to our result the most preferred attribute is Tilapia stock and it is also a significant attribute and therefore the most urgent action is to firstly to prevent further depletion of the Tilapia fish stock of the lake. This is also reflected in their higher willingness to pay for Tilapia fish stock improvement. Very low willingness to pay is observed for improvement in the degraded surrounding vegetation and forest cover of the lake. The marginal willingness to pay(implicit prices) for the environmental attributes Tilapia fish stock and Surrounding forest cover were estimated. The mean WTP for Tilapia fish stock improvement is estimated to be 8.83 birr per month. However, mean willingness to pay for improvements in the surrounding forest cover is almost insignificant. Compensating surplus estimates which reflect overall willingness to pay for a change from the status quo (current situation) to alternative improvement scenarios were also calculated. The estimate for the high impact scenario was estimated to be 31.42 birr, for medium impact scenario 28.62 birr and for low impact scenario it was 18.62 birr per month.
Demand for Public and Private Health Care Services in Addis Ababa
(A.A.U, 2006-07) Hailegiorgis, Samuel; Bedri, Abdulhamid (Dr)
The study is ill tended to investigate the factors that influence the demand for private and public health services ill Addis Ababa. It is undertaken with the view of adding to the existing meager research ill the area. It used the Welfare Monitoring Data 2004 collected by The Central Statistical Authority of Ethiopia. It adopted the multinomial logiest regression to measure the significance of the different individual, household and structural and supplier variables ill the demand for health services. Both the descriptive and the econometric analysis revealed different individual, household and structural vandals do affect the demand for hearth services from both types of providers. one profound result of the study is that still the majority of the residents of Addis Ababa cannot pay for health care and hence the cost recovery scheme in the case of public health provision should be revisited. Further the importance individuals attach to quality in all types of providers should urge the government as well as private providers to give sufficient attention to quality considerations.
Determinants of Household Decision to Adopt Fuel Efficient Technology: Evidence from Improved ("MIRT") Stove Technology a Case in Adea Woreda, East Shoa Zone
(A.A.U, 2007-03) Woubishet, Dawit; Demeke, Mulat (Dr.)
Energy is vital for economic development for both developed and developing countries. The need for energy in developed nations is a question of comfort but for developing nations it is a question of survival and poverty. The needs' for energy in developing countries meet from biomass resource. these resources are heavily utilized and it has adverse effect on the environment and natural resource. And it is directly used by inefficient stoves; this direct burning of biomass has impact on the health of the poor (especially women and children) , income, household environment and resource Improvement was made but success of many interventions in dissemination of efficient improved stoves in both rural and urban settings are not successful due to top down and supply nature of the programs, technology centered and lack (if compatibility with the beneficiary groups. Therefore, those factors indicate the need for existing research to start from the target group not on the technology. The main objective of this study is to analyze the determinant factors that affect household decision to adopt fuel efficient improved stove technology and to acquire information about the technology. Evidence taken from improved (‘Mirt ") stove technology in Adea" wereda, both in rural and urban settings. The study take in to consideration the socioeconomic, demographic, dwelling characteristic, information diffusion and attitudinal variables of the households in the study area. The increasing scarcity of biomass and the increment of the number of people who use biomass, particularly fire wood, threaten the capability of the country even to maintain the already existing low income and living standard (if the people. therefore, the need for adopting improved ‘mirt" stove not only enables the households to use fuel efficiently, but also enable them to curb the problems caused by using traditional and open fire stoves as well as biomass energy related problems. [I can also mitigate the impacts on the users' health. and the overall environment and natural resources brought by using those traditional and open fire stoves. With two conditional equations, that is information and adoption equation. This study result reveals that improvement in socio economic conditions of the people have positive impact in acquisition and access information in urban and rural households. Moreover, the result supports the "energy Ladder" hypothesis as theoretical and functional useful framework to explain the fuel use and improved technology adoption in the study area. The finding also reveals socioeconomic improvements also have direct and Significant impact on adoption decision. This .finding also reinforce the role of government and non government organization to playa major role in provision and diffusion of information and enhal1ce the adoption decision of the people to protect the country natural resource and to resolve environmental problems that arise du e to excessive utilization (if biomass resources.
Challenges of Healthcare Financing: Economic and Welfare Effects of User Fees in Urban Ethiopia
(Addis Ababa University, 2007-06) Guda, Amarech; Mulat, Teshome (Prof)
This study examines the determinants of health care provider choice of urban households of Ethiopia. Particularly, it investigates the effects of user fees on the demand for health care by different segments of socio-economic group using multinomial logit model. The data source of the study is the Ethiopian Urban Socio-economic Survey conducted in 2004 by the Department of Economics of Addis Ababa University in collaboration with the Department of Economics, University of Goteborg in Sweden Cost recovery mechanisms were introduced based on the principle that health care demand in developing countries is price inelastic; so that more resources can be generated for the health sector without reducing the demand by the poor. But the results of this study reveal that for a given rise in health care cost, the poor will reduce the demand for health care significantly in greater proportion relative to the better off. In other words an increase in user fee is likely to drive out the largest portion of the poorest households from receiving medical care. The study also shows the poor are required to pay significantly greater proportion of their income to health care than the better off in order to get treatment. This will aggravate the existing inequality in access to basic health care services. Hence, even though the principle of cost recovery had been advocated as alternative means of health care financing in most developing countries, increasing user fee may drive the poorest population out of health care market or deepen their economic situation unless some reliable protective measures are taken
Estimating Household Energy Demand for Rural Ethiopia using an Almost Ideal Demand System.
(A.A.U, 2008-07) Driba, Dawit; Yesuf, Mahmud(Dr.)
The paper attempts to estimate household energy demand (fuel Choice) using panel data for source of energy consumption . the study contributes to the contemporary literature a coherent view of energy demand (fuel choice) in rural step. The results of the finding suggests that as households’ total expenditure rises. Fuel option widens and fuel mix may change .they respond by increasing the number of fuels they use exhibiting fuel stacking (multiple fuel ) behavior but traditional / inferior fuels are relay entirely excluded from household energy mix it also suggests that households do not simply substitute one fuel for another due only to in come or expenditure increase , rather diversify their fuel consumption in a process of fuel stacking .to envisage this issue deeply , the study used econometric tools of the liner approximation almost ideal demand system (LAAIDS) with normalized prices to compute expenditure elastics and the multinomial log it model of household fuel choice behavior. The fuel stacking (energy Mix) model is based on the fact that in any point in time rural households use multiple sources of energy. Households make inter fuel switch and inter fuel substitution in optimizing their energy mix by adopting multiple fuel use (fuel stacking ) strategy in response to expenditure change. Rather than completely transiting to consumption of new fuels as the energy ladder hypothesis suggests. To prove this .we computed the expenditure or income elasticites of demand for inferior fuels and advanced fuels. The results of the study , that demand is expenditure elastic for advanced fuels and expenditure inelastic for traditional /inferior provides solid and consistent argument /evidence to the economics literature that despite the income constraints. Households prefer the normal good (advantage fuels )to the (inferior fuels. Furthermore ,the study used multinomial log it estimate of the determinants of households choice between inferior used fuels. Advanced fuels and mix of the two fuels to scrutinize the fuel stacking (multiple fuel use ) behavior of house holds in the energy mix model our result indicates that households total expenditure, the fact that the household’s is female headed total land owned by (land holding size), total number of livestock . Owned by household and family size square as predictor have positive coefficients of parameter estimate . this implies that the like hood of household’s choosing inferior fuels or mix of inferior and advanced fuels increases with increment in these predictors. How ever ,family size education of households head ,age households head .time spent on fuel collection and expenditure on advanced fuels have negative parameter estimates ,this indicated that it is less likely that households choose inferior fuel or mix of inferior and advanced fuels compared to advanced fuel with increase in these variable s as predictors. Our result indicates that fuel stacking or multiple fuel use is more applicable hypothesis for rural households of Ethiopia than the simplistic energy ladder hypothesis. In rural areas however , energy choice of households is constrained by lack of access to commercial fuels energy using equipment and appliances energy supply dependency and affordability as well as consumer preference and tastes. Therefore rural households have less poetical for fuel switching due to the a aforementioned factors and the existence of fuel wood which is gathered without any financial payment.

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