Determinants of Urban Poverty in Muklami Town of West Wellega Zone of Oromia, Ethiopia

Abstract

Ethiopia is known all over the world where citizens live in very chronic condition of poverty. Urban poverty has been given less attention on research and development agenda of Ethiopia and particularly, for medium towns like Muklami. The purpose of this study is to measure the magnitude and identify determinants of poverty in Muklami town. Both primary and secondary data sources were use. A cross-sectional survey 143 household heads were carried-out by a using proportional random sampling method. To calculate total poverty line, a Cost of Basic Needs (CBN) approach was utilized. In addition both simple descriptive statistics and econometrics model such as Logit model were employed to analyses the data. The result to the study shows that head count poverty, poverty gap and severity of poverty indices are 35.6%, 12.7%, and 50.8%, respectively. The variables that are positively correlated with the probability of being poor are: sex, family size, health status, and house tenure. Variables negatively correlated with the probability of being poor are: income, educational level, marital status, age, employment status, saving habit, water source, and access to credit. Based on the result of the study, the following recommendation was made. Efforts should be made to raise the real income of households through well-paying and steady job creation by the setup of micro and small scale enterprises, with the increased provision of economic and social infrastructure of houses, education, and better water sanitation services for poverty reduction.

Keywords: Urban Poverty, Cost of Basic Needs, Logit model and Muklami town

DOI: 10.7176/JRDM/57-01

Publication date:July 31^st 2019