Abstract
Poverty is one of the most serious problems of human deprivation and a complex phenomenon. Ethiopian government have been implementing different poverty reduction programs and strategies to fight extreme hunger and poverty. The struggle to reduce rural poverty at household level is a continuing challenge. This study was conducted in Banja district of Awi zone Amhara regional state. The specific objectives of this study were to estimate the rural poverty status, to identify factors determining rural poverty and to estimate the average exit time of poor households. In order to achieve these objectives, cross sectional data on human capital, physical capital, financial capital, natural capital and other institutional characteristics were collected from 190 households drawn from randomly selected five kebeles using structured household questioner. Descriptive and inferential statistics, and econometric model were used to analyze data on poverty status and poverty level, respectively. Hence, setting the poverty line, identifying poor and non-poor rural households, measuring the incidence, depth and severity, and mean comparison between the groups were made. Accordingly, using Cost of Basic Needs approach, the estimated poverty line was Birr 4301 per adult equivalent per year. The Foster Greer and Thorbeck measure of poverty found that 44 percent of sample households were found below poverty line and the poverty gap and poverty severity were 9 percent and 2 percent, respectively. The estimated average exit time of the poor households based on the five-year average per capita Gross Domestic Product growth rate was 3.35 years. Tobit model result showed that household size significantly and positively influence poverty whereas number of livestock and oxen ownership, educational level of the household head, input utilization, asset ownership and credit utilization negatively influenced poverty in the study area. The result suggests that improving adult education, provision of input for smallholder farmers, improving access and availability of credit, improving the livestock sector will be important policy interventions.
Highlights
Poverty is one of the most serious problems of human deprivation and a complex phenomenon
In order to achieve the objectives of this study constructing poverty line using cost of basic needs (CBN) approach was used
The “Food basket” which constitute seventeen food items either from their stock and or purchase were identified. These food items were valued at the annual average local prices of the study district in 2017/18. These consumed food items were converted to kilocalorie and divided to households in adult equivalent
Summary
Poverty is one of the most serious problems of human deprivation and a complex phenomenon. It is a multidimensional concept which encompasses inadequate income and short of the necessities such as education, health services, clean water and hygiene which are crucial elements for human dignity and survival. Dealing with poverty is a priority development concern in many developing countries in general and sub-Saharan countries in particular [1]. Poverty is a threat to the world, especially in developing countries. The governments, national and international development institutions have tried to understand the nature of poverty and mechanisms of reducing it. Development economists argued that the fight against poverty is necessary condition for any economic growth thereby achieve the wellbeing of citizens
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