Analysis of Rural Poverty and Exit time: The case of Gozamn District of East Gojjam Zone, Ethiopia

Abstract

This study was conducted in Gozamn district with specific objectives of measuring rural poverty, estimating the average time needed to exit poverty and identifying the determinants of rural household poverty. The study made use of primary data collected from 120 selected sample households by conducting structured interview employing multi-stage sampling technique. To this end, the CBN approach of setting absolute poverty line was used and the estimated poverty line was found to be ETB 3650.75 per adult equivalent per year. Results of the FGT poverty index revealed that about 49 % of the sample rural households live below poverty line with 9.5% and 3.1% poverty gap and poverty severity, respectively. The average time that the poor rural household might need to exit poverty was estimated to be 4.4 years provided that the 6.4% GDP per capita growth rate per year continues. Econometric results of the binary logit regression model revealed that education, livestock ownership, cultivated land holding, oxen holding, off-farm/non-farm income, credit utilization and frequency of extension contact were found to be as theoretically expected, statistically significant and have a strong negative association with the poverty status of rural households whereas family size alone was found to have a positive association with poverty status of rural households. Hence, promoting equitable economic growth, adult education, family planning, expanded diversification, fostering rural-urban linkages, increasing land productivity, irrigation technologies and promoting research-extension-farmer linkage are indispensible policy interventions to better target rural poverty. Keywords: Rural poverty, average exit time, binary logit, Gozamn