Measurement and Determinants of Rural Poverty: A Comparative Analysis of 'Three Villages

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Conswnption-based pCNerty comparison in three rural villages of Region 3 (Dinki, Yetmen, and Shumsha) show that Dinki, the worst hit village in 1984 drough~ is still poorer, while Yetmen is relatively well-off. Larger household size is unambiguously a significant cause if poverty in all villages. Interestingly, unlike agricultural technology, "formal education" doesn't seem to have direct impact to avoid poverty in all areas, but indirectly by enabling households to limit household size. Also, male-headed households are not any better positioned than female-headed ones to escape poverty. It seems thot only where adoption rate of modern agricultural technology is high (as in Yetmen) that experience and hence age helps. Non farm income is significant determinant of pCNerty particularly in Dinki where agriculture is largely a hopeless venture, which sharply contrasts with Shwnsha where the non farm jobs are despised and left only for those marginalized FalashaslJews people. Assets are particularly usefoJ where non-faml income is a significant part of income as in Dinki. Land not surprisingly, has a strong poverty reducing effect This is not the case with Oxen. To reduce the level of poverty in these areas, limiting household size (through expansion of education), expansion if non-farm employment opportunities, credit supply are the major policy recommendations, though the degree of their importance vary among the areas. Yet these econometric results need to be combined with the PartiCipatory Poverty Assessment (PPA) method in order to obtain even a more reliable outcome.



Determinants of Rural Poverty. A Comparative Analysis of Three Villages