Extent and Determinants of Rural Poverty in Ethiopia: A Review

Abstract

This review work was conducted with the objectives of reviewing recent findings on status and determinants of rural poverty in Ethiopia. Accordingly, recent research articles dealing with both extent and determinants of poverty in many rural areas of the country were reviewed. The descriptive part of the review reveals that poverty head count (p₀) ranged from 27.71% to 68.5%, poverty gap index (p₁) ranged from 7.77% to 27.9% and poverty gap index squared  that indicates severity of poverty ranged from 0.042 % to 32.8%.  The econometric models based analyses of the reviewed articles reveal that large family size, female headship, high dependency ratio, method of planting (broadcasting), incidences of shocks and increase in input prices had significant positive correlation with the probability of falling in to poverty. On the contrary, literacy of the household head, access to extension services, asset ownership, participation in irrigation,  participation in non- farm activities, use of improved seeds, farmer  training, livestock ownership (TLU),  assets owned, access to credit, access to off- farm/non-farm income, vicinity  to the nearest market, employment in formal sector, access to modern inputs, membership in social institutions, engagement of households in petty trading, number of oxen owned and remittance  showed significant negative correlation with poverty.  Improving literacy status  and asset ownership of household, addressing productivity related bottle necks through the use of improved agricultural technologies as well as promoting rural non-farm businesses are the important policy instruments to opt for.

Keywords: Descriptive Analysis, Determinants; Econometric Analysis, Extent, Rural poverty

DOI: 10.7176/RJFA/13-5-03

Publication date:March 31^st 2022