Urban Poverty and its Determinants in Debre Markos City: A Household Level Analysis

Abstract

This study is aimed at examining the extent of urban household poverty using the FGT approach and the national poverty line as a reference. The data were collected from a representative of 316 sample households drawn from each respective kebeles using a combination of simple random sampling and systematic sampling techniques. The findings of the study showed that, the proportion of the poor people is estimated to be 46.8% indicating that almost half of the people in the study area were unable to meet the monthly per adult equivalent consumption expenditure of 315 ETB. The national HICES survey result shows that the poor urban households require only 7.3 % and 8 % of expenditure per capita to reach the poverty line at national and regional level. However, the result of this study showed that in the study area there is a requirement of 34.4% to escape from the poor category. The poverty severity index was also 37.4% in the study area while it was 2.9% and 3.2% at national level and in the region. Therefore, one of the policy implications of this study is that the ongoing national and local governments’ policy intervention should target these 37.4% of the poorest of the poor. The estimation result of the logit model also showed that, level of educational achievements, and household income was negatively and significantly correlated with the probability of being poor at 10% and 1% significance level respectively. Whereas, the variables that were positively and significantly correlated with the probability of being poor were larger family size, unemployment, not owning a house, and household health status/disease at 1%, 10%, 10%, and 1% level of significance respectively . Keywords: Urban poverty, Poverty headcount, Poverty gap, Poverty severity, Logit Model, Debre Markos. DOI : 10.7176/JPID/51-01 Publication date: November 30 th 2019