Determinants of household poverty in Arsi Nagelle town, West Arsi Zone, Ethiopia

Abstract

The struggle to achieve above the poverty line at the household level in the urban areas of Ethiopia dates back an extended period. In this regard, this study was conducted to identify and analyze the determinants of urban household poverty in the case of Arsi Nagele town. The study employed both primary and secondary data. Preliminary data was collected from 337 randomly selected households in two sub-cities by questionnaire. Both descriptive and Logit regression model was used for data analysis. From the three schools of thought, the basic needs approach is employed to identify households as poor and non-poor. Sixteen (14) explanatory variables, four continuous and ten discrete, were included in the logit regression model. Out of these variables, the sex of the household head, age of the household head, marital status of the household head, family size of household head, education level of household head, household head house tenure, household head access to electricity, household head access to the market center, household head access to credit, household head access to clear and sufficient water, the existence of solid institution was among the significant variables affecting the level of household's poverty. The research found that the area's food poverty line and the total poverty line were 13,788 Birr and 14,436 Birr per adult per year, respectively. Accordingly, the incidence of poverty, poverty gap, and severity was found to be 40 percent, 26.5 percent, and 7 percent, respectively. The research found that the area's food poverty line and the total poverty line are 13,788 Birr and 14,436 Birr per adult per year, respectively. Keywords: poverty, Logit, Poverty line, poverty gap, and severity