Abstract
Ethiopia is one of the world’s poorest countries by any standards. As a result government, multilateral agencies and other stakeholders consider poverty as their priority issues. This study is the study on determinants of urban poverty with the objective of identifying the poor from non poor households and main factors those push them to the poverty trap. Cost of Basic Needs (CBN) approach is used to calculate food poverty line and total poverty line respectively. Out of the 381 surveyed household heads, 170(44.62%) of them were found poor. A total of 381 respondents were included in the survey and the main data for the study was collected through structured questionnaire. Binary Logit model was employed to analyze the determinants of households’ poverty. Fourteen explanatory variables were taken in to account in the model’s equation. The result of logit regression using STATA13.1 software confirmed that nine variables were found statistically significant; age of households (1%), income of house hold head (1%), marital status of households(1%), house tenure of households(1%), household family size (1%), households employment status(1%),educational level of households(5%),access to credit(5%) and saving(10%). From these significant variables; age of households, households’ family size, households’ marital status and households housing tenure were positively correlated with probability of being poor. While households education, households income, households saving, households employment status and households access to credits were negatively correlated with probability of being poor. Two sample t-test and chi-squared test was employed to compare non-poor and poor. The poverty head count ratio is extensive among the surveyed households that calls for urgent interventions aimed at solving the problems of the poor. Hence efforts should be made to increase the real income of households through well paying and better job creation by the set up of micro and small scale enterprises, with the increased provision of economic and social infrastructure. Thus, stakeholder interventions to tackle the determinant factors are important measures to be undertaken. Keywords: Poverty, Household, Logit Model, Shashemene, Ethiopia DOI: 10.7176/JESD/12-7-01 Publication date: April 30 th 2021
Highlights
More than half of the population was poor in 1995/1996. While this share of the poor declined to 38.5% in 2004/05 (Tassew et al, 2008; Bigsten et al, 2005), the country is still in the lowest rank as compared to other countries based on both human development and poverty indices
From the table 9:4 we demonstrate that the probability of being poor is higher among widowed households (95.24) this may be due to the fact that if the household head died who is economically managing and the rest may be inactive
The ch2(1)=49.06 P.value=0.047shows as significance at 95 confidence interval, this indicates that access of the of the households to credit is the bolded determinants of poverty in the study areas
Summary
The below table of the survey result showed that households head highest educational level has a significant effect on the probability of being poor or non- poor at 95% confidence interval. The chi-square test ch2 (1) =4.91 P>value = 0.012 shows significance at 95 confidence interval, implying that it is the main determinants of poverty in the study areas www.iiste.org
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