Determinants of Urban Poverty in Ethiopia: The Case of Jimma Town, South West Ethiopia

Abstract

The objective of this study is to identify determinants of urban poverty in Jimma town. In order to meet the objectives of the study, cross sectional, descriptive and explanatory, research design applied. The sampling technique of the study used stratified and simple random sampling was employed to select households. Information has gathered a sample of 397 household heads were through primary and secondary data. A Logit model was employed and estimated based on the primary data, with the probability of a household being poor as a dependent variable and a set of demographic and socioeconomic variables as the explanatory parameters. By Considering total household consumption and dividing it by the household adult equivalent size, from sample of 397 surveyed household heads, the head count, poverty gap, and severity index of the survey obtained as 66%, 17.8% and 3.16 respectively. The finding revealed that variables that are positively correlated with the probability of being poor are gender, family size, employment/occupation and health/disease incidence of the household. Variables negatively correlated with probability of being poor are: income, educational level, and marital status, age of house hold, housing, house hold residence and saving. The major significance which affected significantly the incidences of poverty in the town are: education, income, age, saving, housing, gender, occupation, family size, previous residence, health and employment. The study concluded that most important determinants of urban poverty in the study area that plays a significant role in affecting incidence poverty are income, education and saving are the major implication to incidence of poverty. Study recommended that strong negative relationship between income, education, saving, housing, and residence with the probability of being poor point out that a need to consider government and non-government organization in designing strategy and policies targeted to curb urban poverty.

Keywords: Urban poverty, Jimma Town, House hold-level, analysis

DOI: 10.7176/CER/13-4-01

Publication date:June 30^th 2021