Dynamics and Determinants of Welfare Inequality and Resilience to Food Insecurity in Ethiopia: Evidence from Enset Producing and Non-Producing Households in Central Ethiopia Region
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2025-06
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Addis Ababa University
Abstract
Reducing welfare inequality and ensuring food security remain critical global challenges, particularly in agrarian economies like Ethiopia. The persistent disparities in household welfare between Enset-producing and non-producing households in Central Ethiopia highlight the need for an in-depth analysis of inequality dynamics, resilience, and food insecurity. Therefore, this dissertation investigates the intertemporal dynamics and determinants of welfare inequality and resilience to food insecurity. The research utilizes a mixed-methods approach, drawing on panel data from 270 households across two Ethiopian Living Standards Measurement Surveys (2018/19 & 2021/22) and additional primary data for 2023/24, tracking the same household using GPS coordinates accessed from the Central Statistical Service. Quantitative analysis includes the Atkinson index, fixed-effects regression, and quantile regression to assess determinants and welfare inequality in expenditure and asset value, while multidimensional inequality indices and fixed-effects models explore intertemporal dynamics of multidimensional inequality. Food security and resilience are analyzed using the Consolidated Approach to Reporting Food Security Indicators (CARI) and the Resilience Index Measurement and Analysis (RIMA) framework, respectively. Qualitative data is gathered through household surveys, focus group discussions, and key informant interviews and analyzed using thematic analysis. Besides, Statistical methods, such as t-tests, chi-square tests, and ordered logit models, are used to examine food insecurity and coping strategies. Principal Component Analysis (PCA) and Three-Stage Least Squares (3SLS) regression explore the link between welfare, food security, and resilience, while the Endogenous Switching Regression (ESR) model assesses the impact of Enset production on food security and calorie intake. The findings reveal significant disparities between Enset-producing and non-producing households. The Atkinson index shows that inequality among non-producers increases from 0.356 in 2019 to 0.781 in 2024, while among producers, it rises from 0.262 to 0.582. Non-producers face greater fluctuations in expenditure inequality, influenced by factors such as household size, education, credit access, and income levels, while Enset-producing households demonstrate more stability. Producers also exhibit stronger food security, with higher calorie intake of 2,995 kcal per adult/day compared to that of 1,893 kcal pre adult/day for non-producers) and greater annual food expenditure (96,157.46 ETB vs. 89,098.07 ETB). Enset producers are also less likely to sell assets during times of stress (6.38% vs. 31.25% for non-producers). Furthermore, 75.3% of Enset producers recover from food insecurity between survey waves, compared to only 49.6% of non-producers. Resilience is closely tied to asset ownership, access to services, and adaptive capacity. Endogenous switching regression model confirms that Enset production increases calorie intake by 35.2% among producers, while non-producers would experience a 55.7% decline in calorie intake if they cultivated Enset. Social safety nets and education play a greater role in resilience among non-producers, whereas asset accumulation and land size are more crucial for Enset producers. Enset production is shown to reduce welfare inequality, improve food security, and enhance resilience to food insecurity, though disparities persist due to differences in income diversification, credit access, and exposure to external shocks. In conclusion, Enset production reduces welfare inequality, boosts food security, and strengthens household resilience. Producing households enjoy more stable incomes and better coping mechanisms, yet welfare gaps persist due to disparities in income, financial access, and exposure to shocks. Non-producing households remain more vulnerable, underscoring the need for targeted support. Policies promoting Enset cultivation, expanding credit access, and supporting income diversification can help bridge the gap. Future strategies should focus on enhancing education, financial inclusion, and technological access to ensure long-term improvements in welfare and food security.
Keywords: Welfare inequality, Food insecurity, Resilience, Enset production, endogenous regression model, Atkinson index, 3SLS, Central Ethiopia region
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Keywords
Welfare inequality, Food insecurity, Resilience, Enset production, endogenous regression model, Atkinson index, 3SLS, Central Ethiopia region