Poverty, inequality and Growth in Urban Ethiopia

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This paper compares and analyses the spread, depth and severity of urban poverty and it’s relative Sensitivity to changes in growth and inequality across individual urban units and over time. The Urban Socio-Economic Survey Data conducted by the Department of Economics of AAU and Department of Economics of Goteberg University of Sweden across seven urban centers in four rounds ( 1994, 1995, 1997 and 2000) have been used. Recent techinigues for poverty analysis have been applied. The three decomposable poverty measures along with Gini indices have been estimated for individual urban centers over four study periods. Decomposition techniques of poverty, intended to examine different aspects of it, have extensively been applied. Decomposition of aggregate urban poverty into population weighted share of the sub-groups, allowed to investigate the relative contribution of each urban centre to the aggregate poverty. The elasticity of aggregate poverty to changes in growth or redistribution in 1 th urban centre and analysis of targeting have been employed to priorities urban centers for efficient al location of scare resources and hence maximum reduction in aggregate poverty. Decomposition of poverty at a given point in time into growth and distribution components has also been used to explore the relative sensitivity of poverty to growth and inequality. The observed change in poverty between two periods has also been decomposed into growth, redistribution and residual effects to examine the relative importance of growth or Redistribution as a policy alternative to address the issue of poverty. Using poverty measures as Dependent variables against growth and inequality as explanatory variables, the regression analysis of Panel data have well been discussed to determine the relative elasticity of poverty with respect to growth and inequality.



Growth in Urban Ethiopia, Poverty, inequality