Evaluating the Effects of Irrigation on Poverty and Inequality in Banja Woreda - Amhara Region
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Date
2006-07
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A.A.U
Abstract
This thesis is focused on evaluating the effects of irrigation development in Banja
Woreda on poverty and income distribution. Using multivariate analysis, the
determinants of rural income has been assessed. To avoid the problem of omitted
variables that creates inconsistency in estimation, the fixed effects model has been
employed. The researcher has also used Gini coefficients to evaluate the impact of
irrigation on income distribution.
From the study, it was found that our key variable, irrigation, is a significant determinant
of total income of rural households. Hence, using the simulation Famework, irrigation
has been witnessed to have a greater contribution in reducing poverty incidence in the
study area. In addition to this, the signs and significance of coefficients of other
important variables such as dependency ratio, household size and proportion of output
affected by negative shocks were found as expected. Moreover, income of households that
is attributable from irrigated lands was found influential in abating income inequality
among rural households in the study area. Thus, continued investment in new irrigation
projects and maintenance of existing systems in Banja Woreda will help to attain the
government's rural welfare improvement goals. Moreover, as reducing poverty and
decreasing inequality both have growth-enhancing effects; irrigation investment could
have an added benefit. Therefore, Irrigation investment in rural Banja Woreda appears
to be an investment that can lead to both growth and equity.
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Keywords
Evaluating the Effects of Irrigation, Poverty and Inequality