Adoption of the Wealth Index Approach in Analyzing the Determinants of Household’s Poverty in Tanzania

Yoeni S Kaniki ,Cornelio Swai ,Daudi Kitomo ,Arnold Binagwa

doi:10.7176/jesd/12-14-03

Abstract

This study examines the determinants of poverty in Tanzania using the 2015 Tanzania Demographic and Health Survey data. Ordered logit model was used to model the determinants of poverty and the study revealed that age, sex, household size, level of education, marital status, type of residence and access to financial services are significant in explaining the status of poverty. All of the mentioned variables are significant at 1% except sex of the household head which was significant at 5%. Since it is the global goal to reduce poverty, the study recommends that the government should invest more in education to improve knowledge and skills of individuals, improve financial services and financial inclusion especially in rural areas to eradicate poverty and remove rural-urban disparity. Keywords: Poverty, Household, Wealth Index, Ordered logit model and Tanzania DOI: 10.7176/JESD/12-14-03 Publication date: July 31 st 2021

Highlights

Poverty has been amongst the most sensitive global issues of discussion for many years because of the negative impact it has on the community and environment
The reason behind is to know among the households headed by male or female, which ones suffer from poverty? The results revealed that incidence of poverty, poverty gap and poverty severity are more prominent in households headed by female as compared to male headed households
The mean age is 36 years which implies that majority of the sampled household heads are mature enough to engage in various economic activities for poverty reduction

Summary

Introduction

Poverty has been amongst the most sensitive global issues of discussion for many years because of the negative impact it has on the community and environment. Poverty is widely discussed because the process of economic development in any country involves reduction of poverty, improvement in the health care and education attainment. These have been mentioned as one among the United Nations Millennium Development Goals (MDGs) (Todaro & Smith, 2015). The majority of global poor reside in Sub-Saharan Africa (SSA) as out of the world’s 28 poorest countries with higher rates of extreme poverty, 27 countries are located in SSA with 30 percent level of extreme poverty (World Bank, 2018). Majority of poor people living in rural areas suffer from under nutrition and poor health, have little or no literacy, live in environmentally degraded area, have little political voice, are socially excluded, attempt to earn a meager living on small and marginal farms or in depilated urban slums (Todaro & Smith, 2015)

Objectives

Results

Conclusion