SAMARA UNIVERSITY

Determinants of Poverty in Aysaita District of

Afar Regional State, Ethiopia

By

Anteneh Tadele

College of Business and Economics

Department of Economics

A research proposal submitted to the college of Business and Economics in

partial fulfilment of the requirements for the Degree of Master of Science in
Developmental Economics

Major Advisor: Mohammed Adem (Asist. Prof)

Co – advisor: Abdulrezak Nejmuhdin (MSc)

Jan. 2024
Samara, Ethiopia
Certification

This is to certify that this thesis entitled " Determinants of Poverty in Aysaita District of Afar
Regional State, Ethiopia " submitted in partial fulfillment of the requirements for the award of
the Degree of Master of Sciences, in Developmental Economics (DE) to the Collage of Business
and Economics, Samara University, through the Department of Economics Studies, done by Mr.
Anteneh Tadele, Id. No. SU1000327 is an authentic work carried out by him under my guidance.
The matter embodied in this thesis work has not been submitted earlier for award of any degree
or diploma to the best of my knowledge and belief.

Name of the student: Mr. Anteneh Tadele

Signature___________________

Date ______________________

Name of the Advisor: Mohammed Adem (Assis. Prof)

Signature____________________

Date________________________

Name of the Co-Advisor: Abdulrezak Nejmudin (MSc)

Signature____________________

Date________________________
Declaration

I declare that this thesis entitled " Determinants of Poverty in Aysaita District of Afar Regional
State, Ethiopia " submitted in partial fulfillment of the requirements for the award of the Degree
of Master of Sciences, in Developmental Economics (DE) to the Collage of Business and
Economics, Samara University, through the Department of Economics Studies, done by Mr.
Anteneh Tadele, Id. No. SU1000327/21 is an authentic work carried out by him under my
guidance. The matter embodied in this thesis work has not been submitted earlier for award of
any degree or diploma to the best of my knowledge and belief.

External Examiner:

Name: - ____________________________ Signature _______________

Date _______________

Internal Examiner:

Name: - ___________________________ Signature _______________

Date ________________
Abstract
This paper discussed poverty and its determinants in Aysaita district in Afar region, Ethiopia. 228
households from Aysaita district were surveyed in 2023. with the main objectives to describe
determinants of rural poverty in the study area .In order to attain this objective the study made use of
cross-sectional household survey data collected from 235 sample households .The data collected were
analyzed and discussed applying FGT measure of poverty i.e. poverty head count index, poverty gap and
severity. Using cost of basic needs approach;

The study employed a Logit model to analyse the demographic and socio-economic characteristics of
poor households. The MPI method was used to dene a multidimensional poverty line threshold for the
poor and non-poor

The data was collected from 326 households using a multi-stage sampling approach. The logit model was
applied to estimate the influencing factors on poverty status among targeted households

Of the total household head respondents, 32.29 percent are female, and 67.71 percent are male headed
household and from this on average, the age of the household head was 39 years and average family size
per adult equivalent was 4. 84.27 percent of the household headed were married and 74.31 percent of the
households are literate. Out of the total household heads, 63.54 percent were unemployed but getting
income from sold on-farm and off farm products due to this, the average income was 5,221ETB and food
expense is 3,412.50 ETB per month. About 14.24% of household head were access to credit or loan
service from different financial institutions in the district whereas 85.76 percent were not accessed the
service. 65.16% of the households have their own cellphone and the mean distance between the
marketplace was 3.5km from the household homes.

To examine the incidence, the poverty gap and severity of poverty, and analyzing the determinants of
poverty; Foster, Greer and Thorbecke (FGT) index and logistic model were employed. The results show
that 38.2 percent of the households are poor, with a poverty gap index of 0.128 and poverty severity index
of 0.049, and the Gini coefficient or level of inequality is 0.276. Some of the key determinants of
intensity of poverty among the districts are found to be age, employment level, marketplace credit/loan
service, and ownership of cell phone. However, Family size under 14 children,
education, and income of the households are statistically significant at 5% and 10%
level of confidence interval. There is a high and lowest degree of income inequality (0.289) and (0.273) in
Amolederewa (04) and Beri’daba kebele respectively ware found in the district respectively, and the
highest index (0.283) is observed in unmarried heads of households but there are the same inequality on
accessing the credit/loan service in the district. Strengthening the poverty reduction programs and
introducing diversified income schemes; modernizing local institutions, increase provision of
microfinance services, introducing packages specific to women and youth are recommended to address
the high poverty and inequality in Afar.

Key words: Poverty dimension, Gini coefficient, logistic model, Foster, FGT index., Income inequality

Acknowledgements
First, I praise the Almighty God who helped me to reach this end. Then, I would like to record a
special note of thanks to my research Advisor and co-advisor Mohammed Adem for his earnest
and constructive comments throughout the analysis and to the final write-up of the thesis by
adding valuable comments, which enabled me to complete the research work and thesis write-up.
My thanks also go to my co- advisor Mr. Abdulrazak Nejmudin, for his helpful comments on
realization of the thesis.
I would like to thank my employer, Save the Children International and CARE Ethiopia for
sponsoring me in-country scholarship for this MSc study. I am very thankful to Aysaita woreda
agriculture and rural development and health office for supporting giving me professional
information to find the total number of households in the district.
Finally, my special thanks go to my beloved wife W/o Mushira Wondie, she is always
supporting and helps me overcome difficulties without complaining.
Acronyms and Abbreviations

AHA Animal Health Assistance

BoFED Bureau of Finance and Economic Development
CSA Central Statistical Agency
DAs Development Agents
EDHS Ethiopian Demographic and Health Survey
FGT Foster, Greer and Thorbecke (FGT) index
EHNRI Ethiopian Health and Nutrition Research Institute
AGDO Aysaita Agricultural and Development Office
GDP Gross Domestic Production
GER Gross Enrollment Ratio
AHB Aysaita Health Bureau
GTP Growth and Transformation Plan
AWDO Aysaita Water Development Office
IMF International Monitory Fund
MDG Millennium Development Goals
MoFA Ministry of Federal Affairs
MoFED Ministry of Finance and Economic Development
 MOH Ministry of Health

PCE Per capita expenditure

PG Poverty gap
PGS Poverty gap squared
PH Poverty headcount
PL Poverty line
PHWs Primary Health Workers
PSNP Productive Safety Nets Program
TFR Total Fertility Rate
TLU Tropical Livestock Units
WBI World Bank Institute

Table of Contents Pages

Certification....................................................................................................................................2
Declaration.....................................................................................................................................3
Abstract...........................................................................................................................................4
Acknowledgements.........................................................................................................................5
Acronyms and Abbreviations.........................................................................................................6
1. INTRODUCTION.........................................................................................................9
1.1. Background of the study..................................................................................................9
1.2. Statement of the Problem...............................................................................................11
1.3. Objectives Of the Study.................................................................................................13
1.3.1. General Objective..........................................................................................................13
1.3.2. Specific Objective..........................................................................................................13
1.4. Research Question.........................................................................................................13
1.5. Scope of the Study.........................................................................................................14
1.6. Significance of the Study...............................................................................................14
1.7. Limitations of the study.................................................................................................14
2. Literature Review........................................................................................................15
2.1. Theoretical Concept of Poverty.....................................................................................15
2.2. Why Measuring Poverty is Important?..........................................................................16
2.3. Type of Measuring Poverty...........................................................................................16
2.3.1. Unidimensional/Income poverty measuring..................................................................16
2.3.2. Multidimensional Poverty Measuring...........................................................................17
 2.4. Type of poverty indicators.............................................................................................18
2.4.1. Unidimensional Poverty Indicator – Monitory/non-welfare........................................18
2.4.2. Multidimensional Poverty Indicator – non-monitory/ welfare......................................19
2.5. Type of Poverty Lines...................................................................................................19
2.5.1. Absolute Poverty Lines..................................................................................................20
2.5.2. Relative Poverty Lines...................................................................................................20
2.6. Measures of Aggregate Poverty.....................................................................................21
2.6.1. Incidence of poverty (headcount index)........................................................................21
2.6.2. Depth of poverty (poverty gap):....................................................................................22
2.6.3. Poverty severity (squared poverty gap):........................................................................22
2.7. Determinants of Poverty Line and Intensity of Poverty...............................................23
2.8. Poverty Reduction Strategy Programs in Ethiopia........................................................23
2.9. Empirical Literature.......................................................................................................24
3. RESEARCH METHODOLOGY...............................................................................27
3.1. Description of the Region..............................................................................................27
3.2. Agro-ecological zone and Farming systems..................................................................28
3.3. Sampling Technique and Sample Size..........................................................................28
3.4. Data Types, Sources and Collection Methods...............................................................29
3.5. Methods of Data Analysis.............................................................................................30
3.5.2. Econometric Model for Determinants of Poverty.........................................................31
4.6. Definition of Variables and Hypothesis.............................................................................33
Result and Discussion..................................................................................................................33
4. Results and Discussion................................................................................................33
4.1. Descriptive Analysis......................................................................................................34
4.2. Dimensions of poverty among the district households..................................................36
4.2.1. Poverty in the Kebele.....................................................................................................37
4.2.2. Poverty and Gender of the head of the household.........................................................38
4.2.3. Poverty and Household Marital Status..........................................................................38
4.2.4. Poverty and household access to Market, Credit and Telecom service.........................39
4.2.5. Status of Income inequality...........................................................................................39
4.3. Sources of Income of the Household heads...................................................................40
4.4. Econometric Analysis..................................................................................................41
4.4.1. Goodness of Fit of the Model........................................................................................43
CHAPTER FIVE.........................................................................................................................44
CONCLUSION AND RECOMMENDATION........................................................................44
5.1. CONCLUSION..................................................................................................................44
5.2. RECOMMENDATION......................................................................................................45
REFERENCES............................................................................................................................46
Appendix : Questionnaires.........................................................................................................52

CHAPTER ONE

1. INTRODUCTION
1.1. Background of the study

Poverty in the simplest sense of the word is a state where one lacks access to basic needs such as food,
clothing, and shelter. Poverty is also used to describe a person whose living conditions prevent them from
being able to acquire education, seek medical help, secure a stable job, and participate in recreational
activities due to a lack of money. Poverty is defined to include access to services and security critical to
well-being and not just income and consumption (World Vision, 2022).

According to the World Bank and based on a 2.15$/day poverty line, 689 million people were living in
extreme monetary poverty in 2017 (World Bank, 2021). The same year, 132 million more people were
identified as undernourished (UN, 2019), while 832 million more people lived in fragile settings with
weak national capacities to deliver basic health services (UN, 2019). Besides, 2.3 billion people still
lacked access to basic sanitation (UN, 2019), which is nearly the triple of monetary poverty headcount.
Thus, it appears clear that the elimination of extreme monetary poverty would not necessarily lead to the
eradication of hunger and exclusion from health and sanitation services.

Ethiopia is one of the poorest countries in the world with a large portion of its population believed to be
living below poverty line. A large portion of the Ethiopian population have been affected by chronic and
transitory food insecurity. Absolute poverty is measured by comparing a household’s consumption per
adult equivalent to the national poverty line, set at 3,772 Birr in 2016. The poverty line indicates the
minimum money required to afford the food covering the minimum required caloric intake and additional
non-food items. The headcount index of absolute poverty decreased from 44.2 percent in 2000 to 23.5
percent in 2016 (a decrease of 46.8 percent) (World bank group, 2021 national poverty rates).

Differences in the level of absolute poverty were observed across regions. In 2016, Tigray (27 percent),
Beneshangul-Gumuz (26.5 percent), Amhara (26.1 percent), Oromia (23.9 percent), and Afar (23.6
percent) marked higher poverty headcount index than the figure at national level. The three dominant
urban administrative areas of Harari (7.1 percent), Dire Dawa (15.4 percent), and Addis Ababa (16.8
percent) registered the lowest level of poverty. Poverty incidence in rural Ethiopia (25.6 percent) was
significantly higher than urban Ethiopia (14.8 percent).

The food poverty line, which is estimated based on the cost of a bundle of food that gives a minimum
daily caloric requirement (2200 Kcal), was set at 3772 Birr per year per adult person in 2016. One out of
four individuals in Ethiopia are unable to meet the cost of buying the amount of calories sufficient to meet
recommended daily calorie requirements. Food poverty is substantially higher in rural Ethiopia (27.1
percent) as compared to that of urban Ethiopia (15.2 percent). Tigray, Afar and Amhara have the highest
proportion of food poor. In most of the regions, the level of food poverty is slightly higher than the level
of absolute poverty. may suggest that much of the persistent poverty in Ethiopia is triggered by lack of
sufficient food at household level. Between 2000 to 2016, food poverty marked 40.8 percent reduction at
national level. A relatively faster pace of reduction of food poverty was observed in Harari (about 81
percent), Gambella (about 70 percent), Addis Ababa (59.8 percent), Ben-Gumuz (57.1 percent), Dire
Dawa (55.8 percent) and SNNP 55.2 percent). Registering just a 3.7 percent reduction in food poverty,
Amhara region fared the least performance over the stated period. Approximately 27.8 percent of
households in Ethiopia are estimated to be food insecure in 2021 (WFP, 2023).

The poverty gap reflects the intensity of poverty in a nation, showing the average shortfall of the total
population from the poverty line. The official level of poverty in Ethiopia is based on Br.3,781 per year
per adult equivalent. is equivalent to Br.10.50 per day, per adult equivalent (about $0. 50), with the food
poverty line being Br.5 (Prof. Alemayehu Geda, 2023). Currently, there is a growing consensus that food
insecurity and poverty problems are closely related in the Ethiopian context. More than 57% of the total
population, of whom the majority reside in rural areas, does not have access to the medically
recommended minimum average daily intake of 2200 calories per person per day.

Agriculture and livestock in the areas are the major source of food and income, as well as a source of
employment. Moreover, both are contributing a significant amount to the national economy. However, the
production system and in particular the food security and livelihood situation are highly threatened
because of different man-made and natural risks happened. Some of the major risks and challenges the
pastoral communities in the country are facing include expansion of sedentary agriculture and agricultural
projects; encroachment of unwanted plant species like prosopis tree; and recurrent locust, drought (FAO,
2021).

Afar region is one of the poorest and least developed regions of Ethiopia, neglected by national
development efforts. It is only in recent years that efforts have been undertaken to provide basic
infrastructure such as road accessibility and administrative buildings as well as education and basic health
services for each of the districts. The recurrent drought, chronic food insecurity and flood in Awash river
in Afar region are of major concern by the federal and regional government and humanitarian
organizations (Devereux, 2021). According to regional report by (BoFED 2020), food security situation
in Aysaita district was below normal.

The Afar Regional Disaster Prevention and Preparedness Bureau (DPPB, 2020) divided the region into
12-food economy zones. Of these, six are categorized as ‘pastoralist’, four ‘agro-pastoralist’ and two as
‘agricultural’ food economy zones. Major sources of income include agriculture and livestock and
livestock product sales, crop sales, firewood and charcoal sales, petty trading activities in town areas of
the region. Headcount poverty incidence in Afar region declined from 41.9% percent in 2004/05 to 32.8%
percent in 2020/21. In the same period, the rural poverty head count index declined from 45.2% to 35.1%
while urban poverty also declined from 35.3% to 23.1% which is one of the highest among regions of the
country (MoFED, 2019).

According to a regional report by DRMFSAB (2020), poverty situation in Aysaita district was high, the
zone was suffering food related problems. has been happening frequently in the district due to shortfall
precipitations of rain, complemented by higher prices of basic food grains. Similarly, MoA (2020) report
revealed that, in Aysaita district a significant reduction in the crop production in agro-pastoralist and
sedentary farming livelihood zones due to erratic flood and locust. Crops like sorghum and maize are
highly affected and the district lost 65 to 74 percent of the expected harvest from these crops. Thus, staple
cereal availability is expected to be constrained by the previous drought conditions and access to food is
expected to be impacted by high prices that critically affect poor households. The only food supplies
expected to be available in the cereal markets was relief food.

To have a meaningful intervention and assist the poor in the area it requires identifying the factors
determining the poverty in locally specified context and need to measure the intensity of poverty in areas.
Therefore, it is high time to investigate the poverty status and factors that determine household poverty in
the areas of the district. In addition, it could help to constrict the information and knowledge gaps that are
obstructing in identifying and addressing the poor appropriately through implementation of appropriate
policy and development interventions.

1.2. Statement of the Problem

Comparing multidimensional poverty with unidimensional poverty measured by the percentage of the
population living below 2017 PPP US$2.15 per day, shows that unidimensional poverty only tells part of
the poverty status. for example, the headcount or incidence of multidimensional poverty is 41.7
percentage points higher than the incidence of unidimensional poverty i.e., the individuals living above
the unidimensional poverty line may still suffer deprivations in health, education, and standard of living.
According to Ethiopia’s MPI estimation in 2019, 68.7 percent of the population in Ethiopia (82,679
thousand people in 2021) is multidimensionally poor while an additional 18.4 percent is classified as
vulnerable to multidimensional poverty (22,076 thousand people in 2019). The intensity of deprivations
in Ethiopia, which is the average deprivation score among people living in multidimensional poverty, is
53.3 percent.

Dr. Beneberu 2023 noted that the number of people living below the national poverty line has decreased
from 44% in 2000 to 19% in 2021 i.e., poverty has declined in Ethiopia. According to the Human
Development Index (HDI), poverty in Ethiopia has declined but is still quite high. Consequently, poverty
is a critical development issue that requires political attention, as it can threaten the country's survival and
stability. Finally, he concluded that the deprivation in school attendance is significant among school-age
children, meaning that a significant percentage of children nationwide are not in school.

The main objective of the Ethiopian government is poverty eradication and improvements in the well-
being of people. Achieving important goals requires monitoring and evaluation of the implementation of
policies and programs which in turn require empirical studies based on nationally or regional
representative survey data. The measurement and analysis of poverty is crucial for understanding peoples’
situations of well-being and the factors determining their poverty situations (FDRE, 2018).

Ethiopia is making significant progress out of poverty. The people of Ethiopia are becoming more
productive, healthy, and educated as the government, local organizations, international nonprofits, and the
communities themselves join hands to lift the nation from its status as a developing country. Poverty
reduction in Ethiopia continued despite adverse climatic conditions, with the share of the population
below the national poverty line decreasing from 30% in 2015/16 to 24% in 2020/21 (World Bank Group
poverty assessment, 2021).
According to the 1995 to 2015/16 household consumption expenditure survey report, based on the
national poverty line, the proportion of poor people decreased from 48% to 26%. A significant number of
children in rural areas remain locked in a vicious circle of poverty and vulnerability to environmental and
socio- economic shocks (Ethiopia Poverty Fact Sheet, 2018). Recent records show that 36 percent of the
population of Afar region lives below the official poverty line (MoFED, 2012). But research carried out
in certain districts of the Afar Region indicated that the extent of poverty in pastoral and agro-pastoral
communities is as high as 64.8 percent of the population (Sirajea & Bekeleb, 2011).

The Afar region is one of the regions most affected by recurrent drought and food security problems
(USAID, 2020). Moreover, food security situation was deteriorated due to long dry season, some gaps or
delay of food aid, high price of cereals, declined pasture and water availability, particular areas received
below normal rains, declined livestock body condition, declined milk yield and their prices, increased
malnutrition rate (children from poor households) and disease outbreak for both human and animals
(DRMFSO et al., 2020).

In the study area, it has been experiencing different types of problems that have strong association with
household livelihoods and household poverty. These include crop and livestock disease, recurrent locust
and flood and drought and its related negative outcomes, low agricultural productivity, ineffective and
inefficient agricultural marketing system, and shortage of agricultural inputs (supplies) are the critical
ones among the long lists. Poverty has become the defining feature in Aysaita district (KDAO, 2019).

Most research studied on poverty is target individuals’ rather than households’ level furthermore the
objective is on food security and agricultural activities. Rather than multidimensional poverty, study
provides the quantified impact of determinants of unidimensional poverty in the Aysaita District Afar
Region, Ethiopia targeting households level. The method of analysis is the probit regression model. To
the best of my knowledge, the method of analysis was used the analysis of unidimensional household-
monitory poverty. study uses a one-dimensional poverty index which is more common is a non-welfarist
approach based around the idea of basic needs that set poverty lines using cost of basic need approaches
(MoFED, 2020). Moreover, in the study some variables that can determine poverty are included. For
example, the number of children under 14 years of age and access to telecommunication services was
used in research as one of the determinants in addition to household size and market access which is used
in different literatures.

There is an insignificant number of research works focusing on poverty, income distribution and the
effect of social protection on livelihood in the Afar region. The harsh Afar environment, together with a
lack of resources and limited local research capacity, has discouraged researchers and made it difficult to
conduct large-scale, systematic research work in the Afar region. This study intends to address these
gaps in the literature through an in-depth investigation impact of current social protection program on
poverty and income inequality, in the pastoral and agro-pastoral communities of Afar Region.

Both qualitative and quantitative method of data collection method was employed and consumption per
capital used to indicate the standard of living in study area rather than using income as welfare indicator.
Cost of basic needs approach was used for setting poverty line .Data analysis was done by using
descriptive analysis, FGT and econometric model to capture the influence of explanatory variables on
dependent variable.

To the best of the researcher's knowledge, no published (sucient) study has been conducted (documented)
in the study area dealing with determinants of household multidimensional poverty both in rural and
urban areas.

1.3. Objectives Of the Study

1.3.1. General Objective

The general objective of the study was to identify the determinant and intensity of poverty status of
households in the case of Aysaita District of the Afar Regional State.

1.3.2. Specific Objective

The specific objective of the study was to:
1. Identify the poverty status of households.
2. Estimate magnitude and intensity of poverty of households.
3. Analyze factors affecting poverty status of households.

1.4. Research Question

1. What is the poverty status of the respondents?
2. What are the levels of poverty among households?
3. What are the determinants of poverty among households?

1.5. Scope of the Study

The study was conducted in the Aysaita district of the Afar Regional State. The study covered four (4)
kebeles of the seven kebeles from which a total of 288 sample households was randomly selected.
Additionally, the study was focused on the households in Aysaita district. The study was limited in the
use of cross-sectional survey data that was conducted for the study purpose. Households are the unit of
analysis in study. The study has assessed and estimated the status and determinants of poverty of
households of Aysaita district and identified the determinants of poverty in the study area.

1.6. Significance of the Study

As indicated above, the country in general and the study area in particular have been facing poverty
problems. Identifying and understanding factors that cause and/or influence the problem as well as its
severity at the household level deserves rigorous empirical research where poverty has been pronounced
and has great importance for policy implications and interventions. Similarly, MoFED (2020) report
shows that physical assets are not readily available in the study areas.

Therefore, the outcome of study was contributed towards perception of the extent of poverty problems in
the society, its distribution, and underlying features to help as base information in reducing poverty in the
study area as well as areas with similar characteristics. By providing the above understandings study was
contribute to the poverty reduction efforts of the district and hence the region. Consequently, researchers,
local government, non-government organizations and relevant stakeholders were from the result of the
study to direct their efforts of alleviating poverty.

1.7. Limitations of the study

Due to constraints arising from inadequate infrastructure, harsh environmental conditions and other
logistics related problems, the researcher couldn’t cover all kebele in the study area. So, the researcher
selected only four kebele namely Amolederewa (04), Kulsi’coma (02), Beri’daba (01), and
Aberoberi’fagi (03) using the new administration name selected kebeles are high number of households
headed and densely population. The research results were primarily based on data collected from
randomly selected sample from 288 respondents from four kebele in the study area.

CHAPTER TWO
 2. Literature Review

2.1. Theoretical Concept of Poverty

Poverty is described in different ways. Historically, poverty has been related to income, which remains
the core of the concept today. It has evolved from the 19 th century idea about ‘subsistence needs’ – what a
person needs to survive, to the mid-20th century conceptualization of lacking ‘Basic Needs’, extending the
subsistence idea by also including basic facilities and services such as healthcare, sanitation, and
education, to the late 20th century understanding of poverty as ‘relative deprivation’, including of income
and other resources, as well as social conditions.

Absolute definitions of poverty are based on income (or consumption) in relation to a specific living
standard or basic need: ‘A person is considered poor if his or her consumption or income level falls below
some minimum level necessary to meet basic needs ("poverty line")’ (Source: World Bank PovertyNet
2021).

The unidimensional/monetary approach to measuring poverty is the most used. It uses calculations of
household income (including own production and expenditures per capita) to identify a shortfall in
consumption (or income) from a specified poverty line. In 1990, the poverty line for developing countries
was set by the World Bank at a per capita income of US$370 – the ‘dollar a day’ poverty line. Generally,
a lower poverty line is set, which means the minimum calories necessary to maintain a healthy life. The
upper poverty line adds to the lower one the value of a basic basket of goods and services deemed
necessary for a healthy life, typically including the costs of basic clothing, shelter and accessing services
such as education and health.

Much research on poverty focuses on concepts relating to economic deprivation where individuals or
households lack essential facilities due to inadequate income and thus live below a socially accepted
minimum level of living in that society. And the concept of basic human needs in which state of poverty
is defined when Individual or households fail to meet the basic human needs. The work of Amartya Sen
offers an alternative perspective shifting from the traditional base of fundamental needs and income in
defining poverty. Sen (1992) explains his approach in defining poverty in the context of functioning and
capabilities.

According to literature review, there is no consensus on any meaningful definition of poverty. Much
evidence suggested that poverty is a multi-dimensional phenomenon. In the simplest definition poverty is
the lack of household income (or consumption). Poverty never results from the lack of one thing, but from
many interlocking factors that cluster in poor people’s experience. It encompasses not only low monetary
income and consumption but also low human development, such as education, health, and nutrition.
More generally, poverty means the inability to meet basic needs, including food, shelter, clothing, water
and sanitation, education, and healthcare. In sense, poverty generally reflects a combination of income
poverty at the household level and poverty at the community level in the provision of basic infrastructure
and public services (SDSN, 2012).

2.2. Why Measuring Poverty is Important?

The choice of poverty indicators and parameters that are used to measure poverty depends on
understanding of the concept, its intended objectives and importance given (Abdulkarim and Ducklos,
2006). It varies across objectives, individuals, households, societies, and other factors. However, it is vital
to understand why someone needs to measure poverty and the reason attached to it, thus the following
paragraphs are some of what the existing literatures said about the reason of measuring poverty.

According to Todaro and Smith (2003) measurement of poverty is needed to have a meaningful
understanding how much progress has already been made, how much more to be achieved and how set of
incentives for the government officials to focus on the most pressing needs. Similarly, Ravallion (1992)
stated that the most important reason for measuring poverty is probably not the need for a single number
for some place and date, but rather to make a poverty comparison. Poverty data can inform policies
intended to reduce poverty and its government policies on poverty, permit one to compare poverty over
time, enable one to make comparisons with other countries, and target the poor with a view to improving
their position (Revallion and Bidani, 1994).

2.3. Type of Measuring Poverty

2.3.1. Unidimensional/Income poverty measuring

Generally, it uses the physiological deprivation model to assess lack of access to economic resources
(income) to satisfy basic material needs. A person (or household) is considered poor if the person’s (or
household’s) income cannot acquire the basket of goods and services used to define a threshold for
poverty. The monetary value of the basket is the poverty line and the population of people and households
whose incomes are below line, is then derived through a head count.

While this approach is the most currently used in household and poverty surveys, it is important to
understand that its focus is exclusively on income and expenditure as surrogates for measuring access to
goods and services. Concerns about its limitations as a tool for assessing people’s level of deprivation has
led to definitions that consider other non-monetary aspects such as human rights values enshrined in the
UN Human Rights Charter, The UN Development Program (2020). The Human Development Index has
integrated more dimensions to the income/expenditure measures, notably life expectancy, educational
attainment, and a measure of income (GNI Index). Human development is defined as the process of
enlarging people's freedoms and opportunities and improving their well-being.

Household aggregate income and/or consumption is used to assess monetary poverty. We argue that it
would be preferable to rely solely on consumption data (Deaton, 2006), but deficiencies in internationally
comparable micro-data prevent us from taking the ideal route. For practical purposes, we restrict
ourselves to the World Bank’s international monetary poverty lines to identify the poor, aiming to align
our study with one of the most prominent, albeit perfectible, approaches to assess monetary poverty
globally (Ferreira et al., 2015; Jolliffe and Prydz, 2016). These daily thresholds per person, in 2011 USD
PPP, are $1.90, $3.20, and $5.50 for low income, lower middle income and upper middle-income
countries, respectively. To compute an aggregate monetary poverty measure, the usual FGT0 headcount
ratio is used (Foster et al., 2010).

2.3.2. Multidimensional Poverty Measuring

The Multidimensional Poverty Index (MPI) has been used by the United Nations Development Program
(UNDP) in its flagship Human Development Report since 2010 and is the most widely used non-
monetary poverty index in the world (Godinot & Walker, 2020). It captures overlapping deprivations in
health, education and living standards (UNDP, 2010). The MPI complements monetary poverty measures
by capturing additional information – including broader qualitative aspects of life, like child mortality,
housing conditions, and other basic services such as water and sanitation (Greve, 2020).

Simple headcount ratios or poverty rates do not provide any insights on the depth of poverty. It is possible
that while the number of poor individuals captured by the headcount ratio reduce, the poorest may, in
fact, get even poorer. To address , the Multidimensional Poverty Index, based on the Alkire-Foster
methodology, presents not just the extent of poverty (the headcount ratio), but also the depth of poverty -
captured by the ‘MPI value’ or the adjusted headcount ratio.

The notion of multidimensional poverty is operationalized here using the dual counting approach
pioneered by Alkire and Foster (2011) (AF henceforth), which underlies OPHI UNDP’s global MPI
(OPHI, 2018). index is undoubtedly the most well-known application of the AF method, but the approach
is flexible enough to allow for a thorough analysis of alternative operationalization of the
multidimensional notion of poverty, particularly one including monetary deprivation as one ‘dimension’
of poverty among others.
 2.4. Type of poverty indicators

2.4.1. Unidimensional Poverty Indicator – Monitory/non-welfare

There is no single set procedure for estimating absolute poverty lines. The cost of basic needs (CBN)
approach provides a series of valuable guideposts, but in practice, numerous choices must be made.
Differing country circumstances led to different choices with respect to the overall approach. In addition,
past choices often strongly influence current choices due to the desire to make relevant comparisons with
earlier analyses. More common is a non-welfarist approach based around the idea of basic needs. There
are three methods of setting poverty lines that use caloric requirement: (1) direct caloric intake, (2) food
energy intake, and (3) cost of basic need methods (MoFED, 2020).

Direct Calorie Intake (DCI) method, a poverty line is defined as the minimum calorie requirement for
survival. Individuals who consume below a predetermined minimum level of calorie intake are deemed to
be under poverty. Hence, the method equates poverty with malnutrition. The drawback of this method is
that it does not consider the cost of getting the basic calorie requirement. It totally overlooks the non-food
requirement.

Food Energy Intake (FEI) method, the poverty line is then defined as the level of per capita
consumption at which people are expected to meet their predetermined minimum calorie requirement. It
is normally determined by regressing the per capita consumption expenditure on calorie intake. Then the
predicted value of the per capita consumption expenditure at the predetermined calorie intake level is
taken as the poverty line. Hence, method yields differentials in the poverty line more than the cost of
living facing the poor. In other words, method does not yield a consistent threshold (poverty line) across
groups, regions, and periods.

Cost of basic needs (CBN) is quite like that of FEI. CBN is, in fact, an extension of FEI, as method
defines not only an adequate level of food items, but also an adequate level of non-food items. In sense, it
embodies a warmer concept of poverty, compared with FEI, and is closer to the budget standard methods.
Examples of adequate non-food items may be a given amount of housing space, a given amount of
electricity and water and an adequate amount of clothing. However, there is no satisfactory way to define
non-food expenditures. Each of these approaches has its disciples and critics, and a great deal of research
has been carried out and work in the societal, quantitative, and socio-economic fields has given rise to
international standards, such as the poverty thresholds and lines used by the World Bank (2021) and the
human development indices developed by the UNDP (2021).
Generally, the researcher uses ‘Cost of Basic Needs’ (CBN) approach that represents the share of the
population unable to meet basic needs according to prices of locally available goods and services at the
time. The International Poverty Line of $2.15 per day or 2200kcal per day intakes is an absolute global
threshold to measure extreme poverty line set by the World Bank (2022).

2.4.2. Multidimensional Poverty Indicator – non-monitory/ welfare

In many settings, important aspects of well-being, such as access to quality education or core
services, are not captured by monetary measures of poverty. To address the issue, an established
tradition of multidimensional poverty measures these nonmonetary dimensions and aggregates
them into an index (Alkire et al. 2015). Multidimensional, non-monetary indicators are now broadly
recognized as important. Non-monetary measures also frequently have the advantage of directly relating
to policy agendas and are readily available from censuses and household surveys. While consensus has
emerged on the need to consider the multidimensionality of poverty, methods for incorporating multiple
indicators into welfare analysis remain contentious with debate centered on the implications of imposing
strong assumptions in terms of weighting schemes, the actual extent of new information provided by
generating combined indicators, and the nature of welfare functions.

Non-monetary aspects of poverty, such as those dimensions within the global MPI (health, education, and
living standards), can be determined by factors other than people’s purchasing power (OPHI, 2018;
Alkire and Santos, 2014). Many observable indicators of these dimensions, such as access to school,
access to drinking water, or adequate sanitation are often provided as free public services or are heavily
subsidized. Even where indicators may be related to purchasing power, they reflect different assumptions
about time. Monetary welfare is measured as a flow variable: observed at one point in time and likely to
be volatile (Jolliffe and Ziliak, 2008). In contrast, many non-monetary indicators are inelastic stock
variables, which are less likely to vary over short time spans, such as the education levels of adults or
stunting in children.

2.5. Type of Poverty Lines

Once the monitory or non-welfare is defined and appropriate indicator chosen, the next step is to establish
a minimum acceptable standard of that indicator to separate the poor from the non-poor which is the
poverty line. Before constructing it is necessary to define what poverty line is, poverty line is level of
income sufficient to provide family with minimally adequate of standard of living (Guell, 2005). There
are two main ways of setting poverty lines; absolute and relative in the poverty analysis which is to be
discussed below.

2.5.1. Absolute Poverty Lines

Absolute poverty is meant specific minimum level of income needed to satisfy the basic physical needs of
food, clothing, and shelter to ensure continued survival. The problem is, however, when one recognizes
that these minimum subsistence levels vary from country to country and region to region reflecting the
different physiological as well as social and economic requirements. To avoid unsubstantiated
exaggeration of the problem one methodology is to establish international poverty line which is constant
and then attempted to estimate purchasing power equivalent of the sum of money in terms of
development countries own currency (Todaro and Smith, 2013). According to MoFED (2020) poverty
line is a threshold level of per capita income or consumption or a cut of living standard level below and
absolute poverty line can be interpreted as fixed in any one of the spaces in which we wish to assess well-
being.

Absolute poverty is measured with reference to the cost of a basket of minimum basic goods and services,
for instance food. Populations or households that live below the food poverty line are in absolute and
extreme poverty (also severe poverty and sometimes chronic poverty. Having determined the poverty
line, the incidence of poverty (headcount index), determines what percentage of the population (or
households) live below the cut-off point. In way, the headcount index states the proportion of the
population whose income falls below the poverty line for the context of study. As a result, different
poverty lines yield different headcount indexes within a given income distribution pattern. The most
common approach in defining an absolute poverty line is to estimate the cost of a bundle of goods
deemed to assure that basic consumption needs are met in the specific domain of the poverty comparison.
The difficulty is in identifying what constitutes “basic needs”. For developing countries, the most
important component of a basic need’s poverty line is generally the food expenditure necessary to attain
some recommended food energy intake. is then augmented by a modest allowance for non-food goods
(Ravallion, 1992).

2.5.2. Relative Poverty Lines

The relative poverty line is more properly viewed as a crude measure of inequality. can be understood
primarily in terms of inequality, namely where goods and services are less than available to most
members of the community struggling to maintain the prevalent norm of living. While absolute poverty
lines have dominated the practice of poverty measurement in developing countries, relative poverty lines
are considered more relevant in several developed nations (Hanguton and Khabder, 2009). Since poverty
theorists advocated that absolute poverty concept is more relevant with the development problems of
developing economies than the relative concept. So, it is more appropriate to estimate and analyze
absolute poverty in the study area than relative concept of poverty. Therefore, for study an absolute
poverty line shall be applied for studying the status of poverty line in the study area.

Relative poverty compares the person or household’s income (expenditure) to the income distribution of
the country of residence; it is a first indicator of inequality. As a context- specific measure, it refers to the
minimum amount of income that a person needs to enjoy what is considered an average living standard in
the country of reference. Relative poverty therefore varies from one country to another and from one
region to another. When a person or household is severely deprived of the basic needs considered a strict
minimum to enjoy a basic standard of living, they are in absolute poverty.

2.6. Measures of Aggregate Poverty

According to (MoFED, 2020), Once a poverty indicator has been defined and its minimum acceptable is
established, one can estimate the number and percentage of people who are unable to enjoy the minimum
basic requirements that are deemed to be essential. Given information on welfare measures such as per
capita consumption, and a poverty line, the next issue is deciding on an appropriate summary statistics
measure of aggregating poverty. However instead of browsing all the measures that have been used or
proposed, the study uses the most widely operational and used FGT poverty measures which are
explained below.

2.6.1. Incidence of poverty (headcount index)

is the share of the population whose income or consumption is below the poverty line; that is, the share
of the population that cannot afford to buy a basic basket of goods. The greatest virtues of the headcount
index are that it is simple to construct and easy to understand. These are important qualities. However, the
measure has at least three weaknesses: First, the headcount index does not take the intensity of poverty
into account. Second, the headcount index does not indicate how poor the poor are, and hence does not
change if people below the poverty line become poorer. Indeed, the easiest way to reduce the headcount
index is to target benefits to people just below the poverty line, because they are the ones who are
cheapest to move across the line. But by most normative standards, people just below the poverty line are
the least deserving of the poor (MoFED, 2020). Third, the poverty estimates should be calculated for
individuals, not households. If 20 percent of households are poor, it may be that 25 percent of the
population is poor (if poor households are large) or 15 percent is poor (if poor households are small); the
only relevant figures for policy analysis are those for individuals.
 2.6.2. Depth of poverty (poverty gap):
provides information regarding how far households are from the poverty line. measure captures the
mean aggregate income or consumption shortfall relative to the poverty line across the whole population.
It is obtained by adding up all the shortfalls of the poor (if the non-poor have a shortfall of zero) and
dividing the total by the population. In other words, it estimates the total resources needed to bring all the
poor to the level of the poverty line (divided by the number of individuals in the population) (MoFED,
2012).

2.6.3. Poverty severity (squared poverty gap):

considers not only the distance separating the poor from the poverty line (the poverty gap), but also the
inequality among the poor, that is, a higher weight is placed on those households further away from the
poverty line. More precisely, these measures can be defined in terms of the well-known Foster, Greer, and
Thorbecke (1984) Pα class of poverty measures. When real per-adult (per capita) household expenditure,
Yi, is ranked as:

y1 ≤ y2 ≤ … yq ≤ z ≤ yq+1… ≤ yn

Where Z is poverty line, N is the total population, and q is the number of poor, then Pα is given by:

where qi=1 ; α ≥ 0 for y < z.

Here the parameter α reflects the policymaker’s degree of aversion to inequality among the poor. If α = 0,
there is no concern about the depth of poverty and the corresponding poverty index is called the
headcount index. Hence, corresponds to the fraction of individuals falling below the poverty line. The
head-count index is easily understood and communicated, but it is insensitive to differences in the depth
of poverty. It fails to capture the extent to which individual income (or expenditure) falls below poverty.

If α =1, the poverty index is called the poverty gap index (P1) and it measures the aggregate poverty
deficit of the poor relative to the poverty line; we also call it poverty gap ratio. The poverty gap ratio can
also be interpreted as an indicator of potentials for eliminating poverty by targeting transfers to the poor.
The minimum cost of eliminating poverty using targeted transfer is the sum of all poverty gaps in a
population– (Z-Ȳ0)*q. The drawback of the poverty gap measure is that it does not capture the
differences in the severity of poverty among the poor, that is, it does not capture the transfer of income
among the poor. If income is transferred from the poor to the least poor, the poverty gap index was
unaffected. When α≥1, the Pα calculation gives more weight to the average income shortfall of the
poorest of the poor. Thus, P2 (where α = 2) measures the squared proportional shortfalls from the poverty
line, which is commonly known as an index of the severity of poverty. However, it is not easy to
interpret.

2.7. Determinants of Poverty Line and Intensity of Poverty

The poverty line determines the threshold of income or expenditure, separating poor and non-poor people.
Most countries use multiple poverty lines to capture monetary versus non-monetary measures of poverty,
and how people’s and household incomes are distributed around the poverty line, hence the determination
of relative poverty and absolute poverty. World Bank (2022) poverty lines are based on official national
poverty lines or calculated by World Bank staff based on national income and expenditure surveys.

Intensity of Poverty: One of the most influential factors on the seriousness of the poverty phenomenon is
its intensity. Using relative measures does not provide us with information on the degree of poverty
suffered by poor people. It is therefore necessary to use some kind of indicator of the depth of poverty
alongside the relative measures that provide information on the financial situation of poor people and the
differences with the rest of the population.

The poverty gap (PG) is a measure of the distance of individual poor people from the poverty threshold
p
and it is constructed in the following way: PG=∑ ( u−xi ) where u represents the poverty threshold, xi
i=1

is the equivalent income of person i and p is the number of poor people in the population measure the
intensity of poverty.

2.8. Poverty Reduction Strategy Programs in Ethiopia

The World Bank and IMF initiated poverty Reduction Strategy Program in 1999, in the context of debt
relief for World’s poorest countries to provide debt relief and lending under the enhanced Highly
Indebted Poor Countries (HIPC) initiative. Wholly, the major principles underlying the PRSP focuses on
the importance of country’s poverty reduction strategy as paramount, enhancing the participation of civil
society in the adoption and monitoring of Poverty Reduction Strategy tailored to country’s circumstances,
for sustainability. To summarize the above, integrated institutional, structural, and sectoral interventions
and a consistent macroeconomic framework are needed. The achievement also requires the concerted
efforts of the concerned government partners, the World Bank and IMF; besides, that of Africa/regional
development banks and other multilateral, bilateral assistance agencies, NGOs, private sector
organization, academic and mass media (World Bank, 1999; MoFED, 2012).
The Ethiopian PRSP, which was Sustainable Development and Poverty Reduction Program (SDPRP), has
been built on four building blocks. These are ADLI, Justice and Civil Service Reform, Decentralization
and Empowerment and Capacity Building. In the second stage, “Plan for Accelerated and Sustained
Development to End Poverty” (PASDEP) spanning the five year period 2005 – 2010 anchoring
development objectives directly to a longer-term strategy for achieving the MDGs that are the core
government’s poverty reduction strategies designed to improve the lives of the poor people, taking a
holistic view putting the growth agenda at the center of its poverty reduction endeavor, and aimed to
reduce the total poverty head count and food poverty from 39 and 38 percent in 2004/05 to 29 and 28
percent by 2009/10 respectively (MoFED – PASDEP, 2006).

In the third stage, Growth and Transformation Plan (GTP) was developed from the 2020/21-2014/15 over
the five years period, aimed to sustain broad based, fast, and equitable economic growth to eradicate
poverty. The GTP had the major objectives of Maintaining at least an average real GDP growth rate of
11% and attain MDGs; expand and ensure the qualities of education and health services and achieve
MDGs in the social sector; establish suitable conditions for sustainable nation building through the
creation of a stable democratic and developmental state; and ensure the sustainability of growth by
realizing all the above objectives within a stable macroeconomic framework with main implementation
strategies for sustaining rapid and broad-based economic growth path are dependent on the strategic
pillars such as sustaining rapid and equitable economic growth, maintaining agriculture as major source
of economic growth, creating conditions for the industry to play key role in the economy, enhancing
expansion and quality of infrastructure development, enhancing expansion and quality of social
development, building capacity and deepen good governance and Promote gender and youth
empowerment and equity (MOFED-GTP, 2010).

2.9. Empirical Literature

The following factors were reviewed to the results authors’ research and hypothesized to influence the
poverty of rural households as follows.

There has been some empirical research on poverty in Afar Region. Using FGT measures of poverty and
a sample size of 180 households in Aysaita district of the agro-pastoral communities of Afar Region,
research conducted by Abubeker, Ayalneh, and Assefa (2012) found that 52.5 percent of households were
living under the poverty line, with a poverty gap index 0.16 of and a poverty severity index of 0.07. An
analysis employing the calorie intake method on cross-sectional data from 120 pastoral households in
Chifra found that 64.8 percent of households were living below the poverty line, while the remaining 35.2
percent were food secure households (Sirajea & Bekeleb, 2011).
Bethlehem Mesfin (2023) explained that the descriptive analysis of estimation of MPI, 72% of the
households in the sample are multidimensional poor. The intensity of poverty is 44% and the adjusted
headcount ratio or MPI is found to be 32%. Based on the result of ordered logistic regression model, level
of education of female household head, health status of female household head, employment of female
household head, saving status of female household head, monthly household consumption, and
Household own the house are found to be significant and negatively associated with multidimensional
poverty status of household at 5% level of significance. Moreover, household size and dependency ratio
are significant and positively associated with multidimensional poverty status of household at 5% level of
significance.

Dr. Beneberu, Admassu, and Tilahun (2023) explained the results of the study in terms of livelihood
deprivation indices, characteristics and trends of multidimensional poverty, prevalence, depth, and overall
extent of multidimensional poverty over time, dynamics of multidimensional poverty, determinants of
multidimensional poverty, comparisons of multidimensional poverty in rural and urban areas, and
comparisons of multidimensional poverty by gender of the family head. He concluded that deprivation in
school attendance is significant among school-age children, meaning that a significant percentage of
children nationwide are not in school. has policy implications. The Afar, Somali, and other pastoralist
regions and rural areas are particularly disadvantaged in school attendance.

According to Sisay and Minyahil (2020) showed that multidimensional poverty among rural households
is too severe (83.5%) while living standard dimension contributed most to the incidence and severity of
multidimensional poverty among the given households. In the study area 82 % of the people are
multidimensionally poor and the poor are underprivileged by 49 % of the weighted pointers. Sex of the
household head, educational level, household size, working sector and place of resident significantly
influenced multidimensional poverty. And, according to Oxford Poverty & Human Development
Initiative (2019) global Multidimensional Poverty Index (MPI) shows that 83.8% of the Ethiopian
population live in multidimensional poverty. The MPI is a detailed poverty level indicator that considers
how people experience poverty every day. People living in multidimensional poverty are at least deprived
of one of the three indicators such as health, education or living standards.

Kedir, Belaineh, and Jemal (2017) explained and used mixed method research was employed to better
understand multidimensional poverty. The qualitative result indicated that many groups expressed
poverty manifests as loss of livestock’s, lack of food, lack of water, lack of schooling and health services.
The quantitative result confirmed that there is positive correlation among the three-poverty dimension,
implying multidimensional hypothesis is accepted. The poverty measure indicated 44% of the sample
household found to be poor in two dimensions and 37% poor in one dimension and 8% were found to be
poor in three dimensions. The results from mixed approach converge indicating that poverty is
multidimensional in pastoral and areas.

Bashir (2010) and Sharma (2014) shows that the age of household head is negatively correlated with the
probability of being poor. Whereas Indris (2012) found out that age of the household head affects food
insecurity positively. Workneh (2008) stated that cultural and societal norms in rural areas often create
considerable negative impacts on the status of women, making them vulnerable social groups. The
household head being female is positively correlated with the probability of being poor (Kebede and
Sharma, 2014; Teka et al., 2019; Tsehay and Bauer, 2012). reflects the low level of empowerment of
females to valuable assets (like land) in rural Ethiopia. Bersisa and Heshmati, 2016; Kebede and Sharma,
2014, Sadik, 2012) conclude that education has contributed to poverty reduction and increasing the
welfare of the poor (World Bank, 2016). Literacy and schooling are important indicators of the quality of
life. That is the literacy was found to be negative and significant, which means that literate household
heads are less likely to be poor than are illiterate households (Kebede and Sharma, 2014; Teka et al.,
2019; World Bank Institute, 2005). Households with larger family sizes are more likely to be poor.

Kassie et al. (2014) and Sadik (2012) found that possession of assets such as access to credit was found to
be positively related to the well-being of households in Malawi. The previous study shows that credit is
positively associated with the welfare of households (Teka et al., 2019; Tsehay and Bauer, 2012). Access
to and utilization of credit is facilitated to increase or diversify household incomes and outflow from
poverty. It is remarked that the participation in non-farm opportunities had notable impacts on the
likelihood of a household being poor in Dembel district (Shibru et al., 2013). For rural households in
Mozambique, engagement in off-farm is positively related to the well-being of households (Kassie et al.,
2014).

According to Abubeker, Ayalneh, and Aseffa (2013) shows that about 52.8% of the sampled households
have been living below poverty line with poverty gap and poverty severity indices of 0.16 and 0.07,
respectively. The Gini coefficient is about 0.31. Some of the key determinants of intensity of poverty
among households are found to be diversification of livestock holding, and access to irrigated land,
improved forage, and market centers. Siraje and Bekeleb (2011) confirmed that family size (1.81), age of
household head (0.174), the dependency ratio (2.41) and experiencing livestock disease (2.7) were factors
that negatively affect the food insecurity status of pastoral households, while, herd size (−0.54), income
from livestock production (−0.001) and non-farm income (−0.012) were positively associated with the
food security level of pastoralists in Chifra.
 CHAPTER THREE

3. RESEARCH METHODOLOGY

3.1. Description of the Region

The study was conducted in Aysaita district in Afar National Regional State is in the northeast of the
country and is one of the Elven Regional States of Ethiopia. It is the homeland of the Afar people.
Samara-Logia city administration is the capital city of the region, located at 605 kms northeast of Addis
Ababa with geographic coordinates between 8.83 0 to 14.460 East and 39.730 to 42.410 North. The region
has about 99,646.54 km2 area which accounts for 8.4% of the national land area (ADSWE, 2018). The
Afar Region, the original home of human beings, is divided into five administrative zones and 39 districts
(districts) with 358 rural and 32 urban kebeles.

In Afar region, there are 39 districts and has more than 420 kebeles and Asayita is one of the largest
districts in the region and located in eastern part of Afar National Regional State. The district has 7 urban
kebeles and 13 rural kebeles, from this six kebeles are agro-pastoralist (both animal production and crop
production areas) and the rest seven kebeles are pure pastorals (area of animal production only). The total
land area of the district is 138,800 ha. The total population of Aysaita is estimated at 47,210 persons, of
which about 66% classified as rural and 98.1% of these rural residents are Muslims (FDRE, 2018). In the
district, pastoral, and system of livestock and production is the dominant livelihood strategy. The
livestock population in the district is estimated to be 71,383 cattle, 16,943 sheep, 23,086 goats, 3,277
camel and 482 donkeys (APARDB, 2019). The sedentary part of local people produces various maize,
vegetable, and oil crops. Cotton is also grown as a major crop by private investors along the Awash River
where irrigation is possible.
 Figure 3.1: Administrative map of Afar Region and sampled district.

3.2. Agro-ecological zone and Farming systems

The temperature of the district ranges from 17 0C to 43 0C and rainfall is pattern bimodal; the highest
amount of rainfall is 540mm which occurs from June to September (karma) and the lowest amount of
rainfall is 235mm which occurs between January and March (sugum).The soil of the district from loamy
to clay (PADO, 2014). Although mean annual rainfall is less than 200mm, the alluvial floodplains of the
Awash River and its distributaries as it enters the delta provide limited but very valuable grazing
lands(PADO, 2014). Of the total area coverage of the district, 13,856ha of land is crop land, 5,310ha is
forest and bush, 4,900ha is grazing land, 24ha is horticulture, 10ha is forage land and 7,280ha is bare land
(PADO, 2014).

3.3. Sampling Technique and Sample Size

Before setting the sampling procedure, the researcher was conducting a pilot survey to know the number
of households in four (4) selected kebele with woreda agriculture and rural development and health office
in the study area. Therefore, during the study the number of households headed is 23,386 (Source:
woreda agriculture and rural development and health office on Nov. 7th, 2023).

However, the sampling procedure for researcher was employed multi-stage sampling techniques to select
sample household heads from kebele in Aysaita district. In the first stage, Aysaita district was selected
purposively. In the second stage, from seven kebeles (the highest household unit at village level) in the
district, four kebeles were selected randomly. In the third stage, a total of 288 sample households were
selected randomly based on probability proportional to size (PPS) of the population in each kebele.

Table 1: Sample size calculation

s/n Name of the Total Households Total population selected

Kebele heads sample
1 Amolederewa(04) 1,100 6,160 76
2 Kulsi’coma (02) 973 5,449 67
3 Beri’daba (03) 1,242 6,955 86
4 Aberoberi’fagi (01) 861 4,822 59
Total 4,176 23,386 288

To determine the sample size, researchers used Yemane’s (1971) formula. Given that 23,386 households
live in the district, we get a sample size of 288 households at 95% CI with 0.5 degree of variability at 5%
precision level (Tora, 1987 and CSA, 2012).

N
n= 2
1+ N ( e )
23,386
n=
1+23,386 ¿ ¿
= 288

Where: 𝑛 is the required sample size, 𝑁 is population size in the study area; 𝑒 represents level of
precision.

3.4. Data Types, Sources and Collection Methods

The research used both primary and secondary data. primary data was collected from selected
sample household by using structured questioner, interview, and desk review respectively.
Structured questionnaire is used to gather data on household Sex, family size, number of children
under 14, income and its sources, employment status, expenditure, access to market and their
distance and services of households like telecom and credit services. For the data collection, five
experienced enumerators who speak the local language fluently were recruited and trainees from
the study area. In addition to primary data, relevant secondary data was collected from Aysaita
district Pastoral and Agricultural Office, Administration, Health Office, Water Office, different
NGOs, and Organizations operating in the district.

3.5. Methods of Data Analysis

3.5.1. Poverty Index Estimation Techniques

To identify the poor households, setting the poverty line is required. The Cost of Basic Needs (CBN)
approach was employed to determine the poverty line. This approach is used for the availability of prices
of goods that the poor consume and for its ability to show the real expenditure behavior of households, as
well as the consumption patterns of households. The level of poverty was measured using the Head Count
Index (P0), Poverty Gap Index (P 1) and Poverty Severity Index (P2 ). The headcount index measures the
percentage of the households who fall below the poverty line. The poverty gap index measures the extent
to which low-income families are living below the poverty line. The poverty severity index reflects not
only the poverty gap but also the degree of inequality between the households.

Despite various poverty measurements indicated, the well-known was Foster-Greer-Thorbecke (FGT)
index.

………………………… (1)
Where, Pα is poverty measure; z is the poverty line; y i is household food expenditure per adult equivalent;
n is the number of sample households; q is the number of poor households; i is household index; z - yi is
poverty gap and α ≥ 0.

Therefore, when we set α equal to 0, then equation (1) is reduced to the headcount ratio, which measures
the incidence of poverty.

q
α=0 P0 = ……………………………………………………………………2
n

When we set α equal to 1, we obtain FGT (1) or the poverty deficit. FGT (1) considers how far the poor,
on average, are below the poverty line; we also call it poverty gap and it measures depth of poverty.

q
1
α=1 P1 = ∑ ( z− y)…………………………………………………….3
nz i=0
When α equal to 2 gives the severity of poverty or FGT (2) index. The poverty index gives greater
emphasis to the inequality among the poor that calls for resource redistribution among the poor.

q
1
α=2 P2 = ∑ ( zy i )2…….……………………………………………….4
nz 2 i=0

The Gini-coefficient was estimated, and the procedure was ranking the households based on some quality
of interest in our case Food Expense (consumption expenditure) and then estimating cumulative
proportions. It shows the distribution of expenditure above the poverty line. The closer the distribution
indicates the existence of more poverty in the study area while contrary. Both the FGT and Gini index
were computed by using Stata 14.1 app software.

3.5.2. Econometric Model for Determinants of Poverty

Two techniques are most frequently used in a probit analysis. The first one explains the level of
consumption expenditure per adult equivalent as a function of covariates and the second technique
explains the probability of households falling into poverty and its determinants using logistic regressions.
In this case, the dependent variable is binary, taking the value of 1 if the household is poor and zero
otherwise. We used the second method for examining the determinants of poverty in rural and small
urban areas in Ethiopia. The probability of households falling into poverty is modeled as a function of the
household head’s characteristics: Sex, Age, Marital status, Education level, family size per AE, Number
of children under 14, Employment level, Own livestock per TLU, Own Cellphone/Tele and Credit
services, Marketplace access and Market Distance.

The logit and the probit models are the most frequently used models when the dependent variable
happens to be dichotomous (Liao, 1994; Maddala, 1989; Gujarati, 1988; Pindyck and Runbinfeld, 1981).
Accordingly, in model, the dependent variable takes a value of 1 if the household belongs to below
poverty line, i.e., poor with the probability of Pi, otherwise a value of 0, i.e., non-poor with the probability
of 1-Pi.

Specification of the model is as follows:

y𝑖*= 𝛽𝑖χ𝑖+υ𝑖 υ𝑖 ~ N(0,1) ………………………………………(2)

where i= 1,2,3……n. and

y𝑖 = 1 if y* > 0
 0 if y* ≤ 0

Where yi is the observed dependent variable; yi* is the latent variable, which in study is referred as the
intensity of poverty; xi is factors explaining intensity of poverty; β i is parameters to be estimated; υi error
terms; where υi ~ NID (0, δ2). The limited dependent variable yi* is defined as:

z− yi
yi* = ( ) …………………………………………………………………. (3)
z

where z is poverty line, yi is household consumption expenditure per adult equivalent (AE). The expected
value of the poverty intensity (poverty gap ratio) in poor households can be defined as:

f (z)
Exp(yi / yi* > 0) = χβ + δ …………………………………………(4)
F (z)

βiχi
Where δ is the standard deviation of the error term, z is denoted by the z-score for the area under
δ
normal curve; F(z) is the cumulative normal distribution of z; and f(z) is the value of the derivative of the
normal curve at a given point.

The probit model can be future decomposed to determine the effect of a change in value of the k th
explanatory variables on the change in the expected depth of the poverty. Thus, the change in the intensity
of poverty with respect to a change in explanatory variable among the poor households is:

∂ exp ( yi / yi∗¿ 0 )
∂ Xk
=βK 1−Z
[
f ( z)
−
F( z) F( z) ( )]
f (z) 2
……………………………………... (5)

Binary logistic regression can yield either the odds ratio or marginal coefficients. Odds ratios mean a unit
change in an exogenous variable lead to changes in the probability of the households being poor. On the
other hand, marginal coefficients indicate the effect of each exogenous variable on the probability of
household being poor. Accordingly, the adjusted estimate which is the marginal effect of an explanatory
variable on the expected value of the dependent variable can be estimated by:

∂ E ( yi )
=F ( z ) βi ……………………………………………………………. (6)
∂ Xk

That is the ratio of the probability that would be poor to the probability that the household would be non-
poor. In this study, we were interpreting the effects of change in an explanatory on the dependent variable
using odds ratio as in Norton and Dowd (2018).
 4.6. Definition of Variables and Hypothesis
The summary of explanatory variables, their unit of measurements and expected signs used in Table 2.

Variable Definition Type Measurement expected

Dependent Variables
Poverty Incidence Poverty status in the households Dummy 1 = poor, 0= non-poor
Independent Variables

Sex Sex of the household’s head Dummy 1 if male and 0 if -

female
Age Age of the household head Discrete Number -
variable
AgeSqu Age Square of the Households Discrete Number +
variable
Edu Education status of the household Categorical 1=Illiterate, +
head 2=Primary school, 3=
Secondary School, 4
Higher School
Marital Status Marital status of the household Dummy 1 if HH married and 0 -
head variable unmarried [single…]
Family size AE Household size in number in terms Discrete Number +
of adult equivalent
Child under14 Number of Childrens under 14 of Discrete Number -
total age in the household
Employment Employment Status of Household Categorical 0 = Unemployed, 1 =
Status Head Employed

Livestock owned Total number of livestock owned Discrete Number -

by the HH in TLU
Income of the HH Annual income from on-farming Discrete Birr -
or off-farming
Access to Access to get marketplace to Dummy 1 if HH access to -
Marketplace sell/buy their products marketplace and 0
otherwise
Owen Cellphone Ownership of telephone/mobile by Dummy 1 if yes; 0 otherwise -
HHH
Access to Credit Access to get Credit to grow their Dummy 1 if HH access to -
productions Credit and 0 otherwise
Market Distance Distance of the local market is less discrete km -
than 8km
 CHAPTER FOUR
Result and Discussion

4. Results and Discussion

Analysis and interpretation of the data received from 288 households via a standardized questionnaire
was presented in this chapter. As we know, unidimensional poverty measurement involves two steps (Sen
1976): Identification (to identify who is poor) and Aggregation (effects how poor the society is). Both
descriptive statistics and econometric models (chi- square and probit regression) were used to describe
and analyze the collected data.

4.1. Descriptive Analysis

4.1.1. Analysis of continue and discrete variable

In this section, data obtained from 288 households for the study is summarized.

Table 3: Descriptive Analysis of continue and discrete variable

s/n Variable Mean Std. Dev Min Max
1 Age of the Household head 39 11.03 22 69
2 No of children under 14 years of Age 2 1 0 4
3 Household size per Adult Equivalent Unit 3.90 1.94 2 9
4 Household consumption expenditure pr AEU 3,412.50 1,782.72 1,440 10,080
5 Household Income per month 5,221.84 2,327.49 2,114 14,798
5 Distance of Marketplace 3.5 1.4 1 7
6 No of livestock per TLU 8.4 4.3 0 13
Sources: Own survey result, 2023

On average, the age of the household head was 39 years of age with Std. Dev of 11.03. The minimum and
maximum age of the household are 22 and 69 respectively. On average, there are 2 children under 14
years of Age in a household with Std. Dev of 1 and its minimum and the maximum household size are 0
and 4 respectively. The average household family size per adult equivalent unit was approximately 4 with
2 Std. Div and its minimum and maximum family size per adult equivalent was 2 and 9 respectively. The
average consumption of a household is 3,412.50 birr with Std. Dev of 1,782.72birr and the minimum and
the maximum consumption of the household are 1,440 ETB and 10,080 ETB respectively. On average,
the household income was 5,221ETB with Std. Div 2,327.5 and the minimum and maximum income is
2,114 and 14,798 ETB per month. On the other hand, the mean distance between the place of the market
from household home was 3.5km with Std. Div of 1.4km.

4.1.2. Analysis of Categorical Independent Variable

Table 4: Descriptive statistics of Categorical independent variables
Variable Category Frequency Percent
Sex of the household head Female 93 32.29
Male 195 67.71
Marital status of household head Unmarried 44 15.28
Married 144 84.72
Educational status of household head Illiterate 74 25.69
Primary Education 120 41.67
Secondary Education 61 21.18
Higher Education 33 11.46
Employment Status of household head Unemployed 183 63.54
Employed 105 36.46
Households Having Agricultural area No 77 26.74
Yes 211 73.26
Households Having Livestock Owen No 43 14.93
Yes 245 85.07
No 59 20.49
Household accessing Market service Yes 229 79.51
Households accessing Credit/Loan No 247 85.76
Service Yes 41 14.24
Household having own Telcom or No 100 34.72
Cellphone Yes 188 65.16

Sources: Own survey result, 2023

Of the total household head respondents, 32.29% are female headed and 67.71% are male headed
household. A very small proportion of household heads, that is 15.28% were unmarried while a large
proportion of the respondents, that is 84.27% were married. Of the total household heads, only 11.46%
had higher education whereas a large proportion of the respondents, that is about 21.18% were primary
school completed. Out of the total household heads, 36.46% were employed and 63.54% were
unemployed i.e. there is monthly salary but getting income from sold on-farm and off farm products like
crop and livestock respectively because of 73.26% and 85.07% of the respondents are having agricultural
area and livestock own respectively and petty trade, sells charcoal, and land rent. About 14.24% of the
household heads had access to credit or loan service from different financial institutions in the district
whereas 85.76% of those respondents did not have credit/loan service. About 65.16% of the households
have their own cellphone while the remaining 34.72% of households do not own their cellphone.

4.2. Dimensions of poverty among the district households

Status of poverty - Who are the poor?
Using the CBN, the following steps were employed to obtain the food poverty line (WBI, 2018):

i. Identify and select the 11 food items commonly consumed by most of the poor.
ii. Each food item in the bundle of goods is weighed for kilogram and liter.
iii. Each unit of the food items consumed by a household in a month is divided by the corresponding
number of adult equivalent units-AEU and sum all (Table A1).
iv. Assuming 2,200 kcal per adult equivalent to being the minimum calorie required per adult
equivalent per day in Ethiopia (MoFED, 2020), the researchers estimated the cost of meeting this
food energy requirement.

Finally, a given food expense was a poverty line that provides a monetary value for the food and non-
food components. The incidence of poverty was analyzed using the total food poverty line 3,162 birr per
adult equivalent per month, and further discussion is based on the food poverty line of 2,823 birr. For
various reasons, economic and non-economic factors, the non-food consumption expenditure of the
households is high as it accounts for more than 12 percent of the total spending of the families. Most
importantly, the cost of transportation is the primary input influencing the price of manufactured goods
and services needed by households.

Table 5: Subgroup FGT index estimates, FGT(a)

 P0 P1 P2 Gini Coefficient
All All 0.382 0.128 0.049 0.276
Amolederewa (04) 0.355 0.124 0.049 0.289
Kebeles Kulsi’coma (02) 0.418 0.144 0.056 0.260
Beri’daba (03) 0.349 0.120 0.047 0.273
Aberoberi’fagi (01) 0.424 0.125 0.042 0.271
Gender of Female 0.441 0.160 0.065 0.281
Household Head Male 0.367 0.120 0.044 0.273
Marital status of Unmarried 0.331 0.160 0.065 0.283
Household Head Married 0.370 0.120 0.044 0.273
Educational Illiterate 0.351 0.099 0.032 0.238
Status of Primary Education 0.425 0.151 0.060 0.306
Household Head Secondary Education 0.295 0.090 0.031 0.247
Higher Education 0.455 0.176 0.075 0.264
No 0.407 0.130 0.048 0.265
Accessing
Marketplace Yes 0.317 0.099 0.036 0.278
Accessing Credit No 0.393 0.133 0.051 0.275
Service Yes 0.317 0.099 0.036 0.275
Cellphone No 0.350 0.115 0.043 0.276
Ownership Yes 0.399 0.134 0.052 0.275
Sources: Own survey result, 2023

The overall poverty indices computation using the FGT measures based on total poverty line of 2,823
ETB per adult per month shows that the head count index is 0.3819 while the poverty gap and poverty
severity indices are 0.128 and 0.049, respectively. The head count index (P 0) indicates 38.19% of the
sampled households are poor. This index indicates the percentage of the population whose consumption
expenditure was less than the poverty line [2,823 ETB].
4.2.1. Poverty in the Kebele
The comparison of poverty incidence across the kebeles shows that the proportion of households living
in poverty is markedly the highest in 01 kebeles. According to the household survey results, the depth of
poverty is higher in 01 kebele, followed by 02 and 04 kebeles, implying that more resources are required
to bring the poor households out of poverty in 01 than 02 and 04 considering the number of people who
reside in the respective kebeles.
The overall poverty depth of 0.128 means that if resources are mobilized equal to 12.8% of the poverty
line and distributed to the poor in the amount needed to bring each individual up to the poverty line, then
at least in theory, poverty could be eliminated. In the same way from poverty severity index, 5% falls
below the threshold line implies severe inequality. Thus, it can be inferred that there is a high degree of
inequality among the poorest population. The results also show the existence of sever inequality in 03
kebele even if there is less prevalence of poverty relatively.

4.2.2. Poverty and Gender of the head of the household

The magnitude, depth, and severity of poverty differ across families within a particular household. Many
studies in the Aysaita district support the idea that households headed by females have higher poverty,
poverty gap, and severity indices. As showed in the above table, 44.1 percent of the female-headed
households in our survey were unable to cover the amount of food required to sustain life. These
households are situated 16 percent below the poverty line with a severity index rate of 0.065. Male-
headed households have a lower level of poverty than their female-headed counterparts. The incidence of
poverty measured as the poverty headcount index is 0.367, with an income shortfall index of 0.120 and a
squared poverty gap index of 0.044. In this study, we found that female headed households have a
headcount index of 0.441 and a higher level of poverty, the poverty gap index and poverty severity index
than male headed households.

4.2.3. Poverty and Household Marital Status

In poverty studies, the marital status of the household head is generally recognized as a demographic
variable. The marital status of the head of the household has both economic and social influences. As a
result, least developed country governments increasingly tend to consider this question in their
development agenda and policy interventions. In our study, the highest poverty headcount index 0.370
was observed in married households are poor, and unable to attain the required minimum calorie intake
for a healthy life, with a poverty gap level of 0.120 and a severity index of 0.044, while the lowest level
of the incidence of poverty 33.1 percent was recorded in married [single, divorce, and widow] households
with an income gap index of 0.160 and a poverty severity index 0.065. The high incidence of poverty in
unmarried households might well be a consequence of large family sizes. 13.63% of the unmarried and
36.48% of married have a family size greater than 4 per AE. Another factor is the lack of additional jobs
for household members.
 4.2.4. Poverty and household access to Market, Credit and Telecom service

The incidence of poverty was also analyzed by household access to different services. For various
reasons, households differ in their need or desire to participate in finance and credit facilities. Because of
poor infrastructural development and the cultural and religious features of the communities, the kinds of
credit facilities available in the district were either not available or have not been fully utilized. Still,
households in the district have a common practice and tradition of informal credit services.

In our study, we found that the magnitude, gap, and severity of poverty differ from household access to
credit and marketplace facilities and cellphone ownership in Aysaita district. Access to financial services
is important in enabling households to cover short-term financial constraints, to open new businesses, to
buy a farm or non-farm values, inputs, to buy livestock or breeding stock, or to buy consumable goods
and services and so on. As evidenced in the above table, 39.9 percent of the having ownerships mobile
are poor, with an income shortfall of index of 0.132 and a poverty severity index of 0.052. Compared
with the having mobile, non-mobile or less mobile households had a lower level of poverty 35 percent
with poverty gap index of 11.5 percent and a squared poverty gap index of 0.043. Note that even the
“non-mobile” households are likely to move during harsh environment, dry seasons, or else to have some
household members march with the animals at different times of the year.

Access to and utilization of credit is expected to provide better chances of getting involved in non-
pastoral activities, because of which households might increase or diversify their incomes and escape
from poverty. It is undeniable that credit access facilitates household ability to participate in business
activities and can also support their consumption when they face a food shortage. Due to this, 39.3
percent of the household on 0.133 poverty gap and 0.051 severity of poverty are not getting credit from
different financial institutions in the district therefore accessing no credit service household are unable to
attain the required minimum calorie intake for a healthy life than the households which is accessed the
credit service.

4.2.5. Status of Income inequality

As the income sources of households and the amounts they receive by activity or per specified period
differ, income inequality, as measured by the Gini coefficient, will certainly not be perfectly even and
will be different from the level indicated by the equal distribution line. Income inequality in the study area
was analyzed using the commonly used, established measure of income inequality, the Gini coefficient.

As indicated above table, the income inequality in the study area is 0.276. This general Gini index is
evidence of the existence of a high level of variation among households. There was no higher significant
difference in the Gini index across the kebeles. Results show that the Gini coefficient of food expense of
sample household in 04 kebele is about 0.289 while the figure is slightly higher for samples from 03 and
01 kebeles, which is 0.273 and 0.271 respectively. The combined Gini index for the total sample is about
0.276. The relatively high Gini coefficient of food expense distribution in 02 kebele indicates that unequal
distribution of consumption expenditure prevails among the district while the distribution is better among
respondents living in 04 and 03 kebeles.

Gini coeff
0.295
0.289
0.29
0.285
0.28
0.275 0.273
0.271
Gini coeff

0.27
0.265
0.26
0.26
0.255
0.25
0.245
Kulsi’coma (02) Aberoberi’fagi Beri’daba (03) Amolederewa
(01) (04)

District

Table 6: Lorenz Curve and their income inequality

100
Equality Curve
80
% of Cuml Income

60

Equality
40
Aberoberi fagi (03)
Amolederewa (04)
20 Beri daba (01)
Kulsi coma (02)
0
0 10 20 30 40 50 60 70 80 90 100

% of population

The x axis shows the percentage of the total population. The y axis shows the percentage of total income
or wealth. The word ‘cumulative’ in both axes means up and included. Interpreting the data from the
Lorenz curve is quite simple. Pick a point from the x axis and read off the y axis. For example, reading off
the diagram, 50% of the population has access up to and including 5% of the country's national income.
In this example, income is distributed very unequally as half of the population has a very small share of
the country’s national income. The Lorenz curve can shift closer or further away from the 45° line of
equality. In the diagram below, the Lorenz curve has moved closer to the line of equality. This means that
inequality in this economy has decreased.

The closer the Lorenz curve is to the line of equality the lower the income or wealth inequality in an
economy.

4.3. Sources of Income of the Household heads

Based on the nature of their livelihoods, households in the district had depend on different sources of
income. We found that households participate in a range of types of employment or activities to generate
income and maintain themselves. According to [Table 4], 63.54 percent of the households do not have
extra jobs to improve their monthly or yearly income. They depend on their primary activity as the
principal source of their households’ income, even though many would like or are looking for additional
jobs. Only 36.46 percent of families who are participating in other alternative income generating
activities, which might change from time to time.

Table 6: Household main and supplementary income sources

s/n Sources of Income Freq. Percent Monthly Income

1 Government Employe 73 25.35 1,233.73
2 Private company employee [NGO, 18 6.25 1,283.93
3 On- Farm (Agricultural – Crop sell) 21 7.29 1,354.42
4 Off- Farm (Livestock sell) 52 18.06 1,272.25
5 Firewood/Charcoal sales 50 17.36 1,363.83
6 Owned Land rent 28 9.72 1,290
7 Petty trade_ Retailer, whole seller 46 15.97 1,434.50
Total 288 100 1,318.95
Sources: Own survey result, 2023

From all sources of income, in the above table, the mean monthly income of households is Birr 1,318.95.
The split is as follows: agricultural sector (Birr 1,354.42), the sale of livestock (Birr 1,272.25),
government employed (Birr 1,233.73), on - farm crop sells income (Birr 1,354.42) and so on.
 4.4. Econometric Analysis

Binary logistic regression analysis was used to identify the effect of each independent variable on the
studied district poverty status of the households. Since the response variable is binary meaning zero or
one, with one being unidimensional poor and zero otherwise. The parameter estimation analysis was done
by using Stata 14.1 software package. The resulting maximum likelihood estimate of model parameters is
presented below.

The results of the logit model are given in Tables 3, 4, and 5 below, consisting of the variables, the
estimated coecients, the odds ratio, and the marginal effects for explanatory variables included in the
model. The odds are the ratio of the probability of being poor to the probability of not being poor. The
odds ratio gives the change in the odds of being poor as opposed to not being poor in response to one unit
increase in the independent variables. The marginal effect is the percentage change in probability
associated with a unit change in the explanatory variable

Table 7. Maximum Likelihood Estimates of Model Parameters

Logistic regression Number of obs. = 288

LR chi2(14) = 208.98
Prob > chi2 = 0.0000
Log likelihood = -87.031155 Pseudo R2 = 0.5456

-------------------------------------------------------------------------
poor | Odds Ratio Std. Err. z P>|z| [95% Conf. Interval]
------------------------------------------------------------------------
Sex |
Male | .9905447 .4217702 -0.02 0.982 .4299676 2.281983
Age | 1.021052 .0278819 0.76 0.445 .9678415 1.077189

Marital Status
Married | .4903203 .2957076 -1.18 0.237 .1503586 1.598938

Education| .4935944 .1613704 -2.16 0.031* .2600684 .9368127

Illiterate| .37922 .2563039 -1.43 0.151 .1008297 1.426244

Fam_SZ/AE| .9386817 .183492 -0.32 0.746 .6399217 1.376924

Child<14 | .2012766 .0504636 -6.39 0.000*** .1231351 .3290064

Employment level
Employed | 1.168475 .5798783 0.31 0.754 .4417677 3.090613
TLU_AE | .978602 .0450117 -0.47 0.638 .8942402 1.070922
Income_hh| .999021 .0001666 -5.87 0.000*** .998695 .999348

Marketplace access
Yes | 1.564649 .853804 0.82 0.412 .5369453 4.559362

Credit Service
 Yes | 1.413326 .8178387 0.60 0.550 .4546574 4.393399

Telcom Service
Yes | 1.829724 .7760678 1.42 0.154 .7968064 4.201634
MktDist | .903632 .1246567 -0.73 0.463 .6895531 1.184174
_cons | 3200.698 5408.21 4.78 0.000 116.6734 87804.65
-------------------------------------------------------------------------
Source: Own survey data (2023). *** and ** indicate statistical significance at 5 and 10% probability
level, respectively. LR chi2(14)=208.98***.

Since the logistic model is not linear, the marginal effects of each independent variable on the dependent
variable are not constant but are dependent on the values of the independent variables (Green, 1993, cited
in J.G. Rodriguez, 2010)

The above table, estimated binary logit regression model fit results Sex, Age, Marital status, Education
level, family size per AE, Number of children under 14, Employment level, Own livestock per TLU,
Own Cellphone/Tele and Credit services, Marketplace access and Market Distance. Therefore, from these
independent variable’s Age, Employed, Marketplace access, Credit Service, and
Telcom Service have odd ratios greater than one, which means that; these variables are positively
correlated with the poverty likelihood of being poor households and the rest independent variables are
negatively correlated with the poverty likelihood of being poor because their odd ratios is less than one.
The likelihood ratio Chi-square of 208.98 with a p-value of 0.0000 tells us that our model as a
whole fits significantly better than an empty model (i.e., a model with no predictors).

Due to this, from a total of twelve explanatory variables hypothesized to determine intensity of poverty,
most of them are not significant. The logic model output is presented in above table 7 shows that
CHILD<14, and income of the household have statistically significant influence on intensity
poverty among the district at P<0.01 while Education, is statistically significant at P<0.05 and some
of the remaining variables such as Sex, Age, Employment level, TLU_AE, Marketplace
access, Credit Service, and ownership of cell phone are not statistically significant.
However, before fitting the model, using Hosmer- Lemeshow specification test. The results of the tests
show that there is no serious econometric problem that could lead to biasness of the research findings (see
below goodness of fit the model table 7).

The interpretations for odds and odds ratio are as follows: For instance, if a household head has a
remittance, the odd ratio of being poor decreases by a factor of 0.407, or we can also interpret it like this:
when the variable remittance increases by one percent, ceteris paribus (while the values of all other
variables remain unchanged), the ratio between the probability of being poor and the probability of being
non-poor will be decreased by 0.407 percent, which implies remittances would have an impact on
reducing poverty. As the age of the household increases by one year, ceteris paribus, the odds ratio of
falling into poverty increases by a factor of 1.017. On the other hand, as the number of family members
in the household increased by a unit, the odds ratio, keeping all other independent variables constant,
increased by a factor of 1.368, which pinpoints the positive relationship between household size and
poverty. As households are headed by women, the odds ratio of being poor increases by a factor of 3.384.
The educational attainment of the heads of household (in this case, secondary edu level) was found to be
associated with poverty. The results obtained from the model revealed that as the heads of the household
get Secondary education, ceteris paribus, the odds ratio of the household being poor decreases by a factor
of 0.313, or we can say that, as the secondary level education of the household head increases by one
percent, ceteris paribus, the ratio between the probability of being poor and the probability of being non
poor will be decreased by 0.313 percent. This implies that a lack of education is a factor that accounts for
a higher probability of being poor. Thus, as a policy option, promotion of education is central to
addressing problems of poverty, especially Secondary-level education, which was found to have
paramount importance in reducing poverty in the study area.

Therefore, the effect of changes in the explanatory variables on intensity of poverty is discussed based on
the marginal effect part of the Logistic model output [table A6]. The negative sign but not significant
association between the variable Sex and intensity of poverty among in the kebele shows that male-
headed households in the districts were less vulnerable to poverty than female-headed households. Thus,
having male headed household poverty intensity of poor households reduces by 0.1%. The possible
justification is related to resource mobilization, workload on women, and early marriage. Under family
size, the total number of CHILD<14 negatively affects the incidence of poverty and significant at 1
percent level of significance. A one unit increase in the number of CHILD<14 increases the odds-ratio
(likelihood) of being poor by 0.2013. The likely explanation is that as CHILD<14 size increases demand
for household food increases, with limited opportunity of employment opportunities in the district.

On the other hand, coefficient associated with literacy was found to be negative and significant, which
means that Educated household heads are less likely to be poor than are Illiterate households.
Having a scholarly household head modestly reduces the likelihood of a family he is being poor, with an
odds ratio of 0.493. An explanation for this is that education might increase earning potential and
improve the occupational and geographic mobility of getting employment that the illiterate one.

Our findings under TLU_AE show that a unit increase in livestock holding per AE tends to decrease the
intensity of poverty of poor households by 0.21%. The reason is that livestock is used as source of
consumption, source of cash income, means of purchasing power, social security and means of coping.
The variable MktDist is found to be associated negatively with the intensity of poverty of sample
district households. Specifically, with a kilometer increase in market distance from household residence,
the poverty intensity tends to increase by about 0.96%% for the poor sample households and by 1.6% for
the total samples, keeping other things constant at their mean value.

4.4.1. Goodness of Fit of the Model

The goodness of fit or calibration of a model measures how well the model describes the data. Assessing
goodness of fit involves investigating how close values predicted by the model are to the observed values.

Table 7: Hosmer- Lemeshow Goodness of Fit Test

Logistic model for poor, goodness-of-fit test

(Table collapsed on quantiles of estimated probabilities)

+--------------------------------------------------------+
| Group | Prob | Obs_1 | Exp_1 | Obs_0 | Exp_0 | Total |
|-------+--------+-------+-------+-------+-------+-------|
| 1 | 0.0017 | 0 | 0.0 | 29 | 29.0 | 29 |
| 2 | 0.0083 | 0 | 0.1 | 29 | 28.9 | 29 |
| 3 | 0.0414 | 0 | 0.7 | 29 | 28.3 | 29 |
| 4 | 0.1121 | 6 | 2.2 | 23 | 26.8 | 29 |
| 5 | 0.2512 | 7 | 5.3 | 21 | 22.7 | 28 |
|-------+--------+-------+-------+-------+-------+-------|
| 6 | 0.3994 | 5 | 8.9 | 24 | 20.1 | 29 |
| 7 | 0.6598 | 13 | 15.5 | 16 | 13.5 | 29 |
| 8 | 0.8656 | 24 | 23.1 | 5 | 5.9 | 29 |
| 9 | 0.9743 | 27 | 26.6 | 2 | 2.4 | 29 |
| 10 | 0.9972 | 28 | 27.6 | 0 | 0.4 | 28 |
+--------------------------------------------------------+

number of observations = 288

number of groups = 10
Hosmer-Lemeshow chi2(8) = 36.81
Prob > chi2 = .9986

The diagnostic test results of the Hosmer- Lemeshow test presented below shows a chi-square value of
36.81 with p-value of 0.9986 > 0.05 - which is indicates there is a good logistic regression model because
of there is a small chi square with large p-value greater than 0.05. Therefore, there is no difference
between the observed and the model predicted values and hence estimates of the model adequately fit the
data.

The interpretation of the marginal effects would be as follows: It is estimated that an additional unit in

household size increases the probability of a household being poor by about 0.050, holding all other
variables constant at their mean values. Having a larger household size increases the chance of falling

into poverty. This nding was consistent with the research results of Sudhakara and Nega (2013). The

sex of HH is signicant at a less than 10 percent level of signicance and is positively related to the

probability of being poor. This shows that having a female household head increases the probability of a

household being poor by about 0.067, holding all other variables constant at their mean values. One of

the determinants of rural household poverty is the total livestock held by the household. As hypothesised,

the livestock owned by the household has a signicant and positive correlation with the poverty level of

the household. An additional unit in household level of education increases the probability of a

household not being poor by 0.064, holding all other variables constant at their mean values. This implies

that the risk of an individual being poor diminishes as the level of education rises.

CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.1. CONCLUSION

Findings of this study shows that the intensity and magnitude of poverty among the district is determined
by Sex, Age, Marital status, Education level, family size per AE, Number of children under 14,
Employment level, Own livestock per TLU, Own Cellphone/Tele and Credit services, Marketplace
access and Market Distance. Of the total household head respondents, 32.29 percent are female, and
67.71 percent are male headed household and from this on average, the age of the household head was 39
years and average family size per adult equivalent was 4. 84.27 percent of the household headed were
married and 74.31 percent of the households are literate. Out of the total household heads, 63.54 percent
were unemployed but getting income from sold on-farm and off farm products due to this, the average
income was 5,221ETB and food expense is 3,412.50 ETB per month. About 14.24% of household head
were access to credit or loan service from different financial institutions in the district whereas 85.76
percent were not accessed the service. 65.16% of the households have their own cellphone and the mean
distance between the marketplace was 3.5km from the household homes.
The results show that 38.2 percent of the households are living below the food poverty line (2,823), with a
poverty gap index of 1.28 and poverty severity index of 4.9 percent so poverty isn’t only widespread but
also profound in the district. Since the Gini coefficient or level of inequality across the district was 0.276.
Some of the key determinants of intensity of poverty among the districts are found to be age, employment
level, marketplace credit/loan service, and ownership of cell phone. However, Family size under
14 children, education, and income of the households are statistically significant
at 5% and 10% level of confidence interval. There is a high and lowest degree of income inequality
(0.289) and (0.273) in Amolederewa (04) and Beri’daba kebele respectively ware found in the district
respectively. Households with married household heads are characterized by a high level of poverty
(0.370), slowing from their large family sizes. Female-headed households have a significantly higher
poverty level (0.441), relative to male-headed households and inequality index of (0.283) is observed in
unmarried heads of households and the female headed households are (0.281) higher index so
empowering women to improve their access and controlling the resource to better institutional and legal
system could contribute a lot in reducing the intensity of poverty in the district. 38.5 percent of the mobile
households are higher food poverty compared with non-mobile.

The district is engaged in three significant occupations or economic activities, providing most of their
incomes: government job incomes (25.35%), off-farm (livestock – sell) incomes (18.06%) and
firewood/charcoal sales (17.36%). The mean monthly income of households is Birr 3,412,58, and the
annual income of households is Birr 40,950.96.

However, marketplace, credit utilization, and ownership of the cell phone showed positive relation with
the intensity of poverty. The increase in kilometer from household district to marketplace, the poverty
intensity tends to increase by about 1.56% for the poor sample households and by 66.26% for the total
samples, keeping other things constant at their mean value. On the other hand, getting the loan service
even the credit service in the district is considered the pro-poor, it hasn’t been able to list the households
above the poverty line. Credit is supposed to be used to purchase agricultural inputs such as improved
varieties, agricultural hand tools and implements for free from the regional government, and NGOs
because 73.26% of the respondent have agricultural land for a minimum of 1.7 hectare.

5.2. RECOMMENDATION

The five most important sources of vulnerability in the district were found to be food price/inflation,
drought, increasing temperature, agricultural input, and human disease and the three most assets in the
district are camels, cattle, and shoats. Therefore, the district should design, manage, and mitigate
appropriate policy intervention measures to reduce poverty and improve sustainability for livelihoods,
particularly food security. The following are the recommended methods.

 Increasing livestock production as well as access to livestock markets.

 Since prosopis, is a major threat to both crop and livestock production in the district so Aysaita
woreda government should design short- and long-term plans on how to utilize and/or control
such plants to ensure sustainable development.

One of the major challenges facing the district is corruption. The district needs to establish transparent
systems of planning, budgeting, implementing, and monitoring socio-economic development projects and
programs, and ensuring access and equity among different social groups and administrative zones in the
new kebele administration. On the other hand, improving access to major services and facilities including
market access and credit services should remain the major focus of development interventions by the
district authorities.

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Annex A
Table A1: Identified 11 food item and food expense (Poverty line = 2,823ETB to get a 2,200 kcal/day)

s/n Food items kcal/ Kg/month Kcal/month Kcal/ Share Averag Food
100g /AEU /AEU AEU (%) e price expenses
/Day
1 Teff 358 10.10 25,310.60 844 0.38 80.0 808
2 Wheat 326 4.3 9,812.60 327 0.15 65.0 280
3 Maize 361 5.2 13,140.40 438 0.20 55.0 286
4 Sorghum 344 1.75 4,214.00 140 0.06 60.0 105
5 Onion 37 2.15 556.85 19 0.01 80.0 172
6 Red paper 311 0.7 1,523.90 51 0.02 180.0 126
7 Meat 289 1.5 3,036.08 101 0.05 450.0 675
8 Sugar &Salt 400 0.5 1,400.00 47 0.02 80.0 40
9 Milk 65 1.21 550.55 18 0.01 80.0 97
10 Oil 900 0.5 3,150.00 105 0.05 350.0 175
11 Coffee &tea 1180 0.4 3,304.00 110 0.05 150.0 60
Total 4,571 28.31 65,998.98 2,200 100 2,823
%
Sources: Own Survey 2023

Table A2: Conversion factors used to estimate Tropical Livestock Unit (TLU) of own livestock
Type of livestock TLU Type of livestock TLU
Cow/Ox 1 Calf 0.2
Camel 1.25 Sheep/goats 0.15
Mule 1.15 Poultry 0.005
Horse 1.1 Donkey 0.65
Heifer 0.5
Sources: Storck et al. (1991) cited in Yizengaw et al. Conversion factors used to estimate (TLU).
Table A3: Adult equivalent figures for different household sizes

Average adult equivalent

Household size
(OECD) AEEI
1 1 0.9 Note:
2 1.64 1.74
“Adult equivalent energy
3 2.2 2.41
intake” (AEEI), and
4 2.76 3.1
“Organization for Economic
5 3.3 3.86 Cooperation and
6 3.83 4.6 Development” (OECD) adult
7 4.38 5.34 equivalence scale (also known
8 4.9 6.1 as the “Oxford scale”).
9 5.44 6.8
10 6.09 7.75
Source: ILO estimates based on Ethiopian Socioeconomic Survey, 2018–2019
Table A5: Spearman Binary Correlation matrix of coefficients of logistic model for explanatory variable

. vce, corr

Correlation matrix of coefficients of logistic model

| poor
|
e(V) | 1.Sex Age 1.Marita~s Educat~n Illitr~e Family~E Child~14 1.Emlpym~l
-------------+--------------------------------------------------------------------------------
poor |
1.Sex | 1.0000
Age | -0.0396 1.0000
1.MaritalS~s | 0.0198 -0.2638 1.0000
Education | -0.1143 -0.0429 0.1925 1.0000
Illitrate | -0.0451 -0.1774 0.1247 0.7126 1.0000
FamilysizeAE | -0.0264 -0.6640 -0.1921 -0.0175 0.0458 1.0000
ChildUnder14 | 0.0387 0.0864 0.1167 0.1615 0.0832 -0.2777 1.0000
1.Emlpymen~l | -0.1324 0.0706 0.0017 -0.3018 -0.0334 -0.0566 0.0257 1.0000
TLUAE | 0.0921 0.0067 -0.0398 -0.1437 -0.0680 0.0116 0.0218 0.1144
PerCapIncm | 0.0356 -0.0117 0.2613 0.2534 0.1976 -0.1223 0.2956 -0.1286
1.Mktaccess | 0.0655 0.0289 -0.0784 -0.0219 -0.0008 0.0449 -0.2112 0.2689
1.CreditSe~e | 0.0471 -0.0006 0.0587 -0.0235 -0.0666 -0.1020 -0.1254 -0.0368
1.TellcomS~e | -0.0737 -0.0110 -0.1157 -0.0370 -0.0025 0.0790 -0.1465 -0.1234
MktDist | 0.1386 -0.0035 0.0114 -0.0528 0.0029 0.0315 0.0494 0.0546
_cons | -0.1555 -0.2754 -0.2243 -0.5639 -0.4317 0.1508 -0.3446 -0.0081

e(V) | TLUAE PerCap~m 1.Mktacc 1.Credit 1.Telcom MktDist _cons

-------------+----------------------------------------------------------------------
poor |
TLUAE | 1.0000
PerCapIncm | -0.0347 1.0000
1.Mktaccess | -0.0032 -0.1096 1.0000
1.CreditSe~e | -0.1171 -0.0923 0.1626 1.0000
1.TellcomS~e | 0.0155 -0.2019 -0.1517 -0.0577 1.0000
MktDist | -0.0059 0.0399 -0.1152 -0.0579 0.0076 1.0000
_cons | -0.1688 -0.5812 -0.1583 0.0730 0.0424 -0.3088 1.0000
Source: Owen Survey 2023
Table A6. Maximum likelihood estimates of logistic model and marginal effects.
. margins, dydx (poor)

Average marginal effects Number of obs. = 288

Model VCE : OIM

Expression : Pr(poor), predict()

-------------------------------------------------------------------------
Delta-method
| dy/dx Std. Err. z P>|z| [95% Conf. Interval]
-------------------------------------------------------------------------
Sex
Male | -.0009026 .0404546 -0.02 0.982 -.0801921 .0783869
Age | .0019795 .002591 0.76 0.445 -.0030987 .0070577

Marital Status
Married | -.0685865 .0579926 -1.18 0.237 -.1822498 .0450769
Educati | -.067084 .0300179 -2.23 0.025 -.125918 -.00825
Illitra | -.0921295 .0633861 -1.45 0.146 -.2163639 .0321049
F_ZE/AE | -.0060124 .0185672 -0.32 0.746 -.0424034 .0303786
Child<14| -.152315 .0151619 -10.05 0.000 -.1820318 -.1225982

Employment level
Employed| .0148159 .0472698 0.31 0.754 -.0778312 .1074629
TLUAE | -.0020552 .0043595 -0.47 0.637 -.0105997 .0064893
PerCapIn| -.000093 .0000116 -8.05 0.000 -.0001157 -.0000704

Makepeace access
Yes | .04158 .0493625 0.84 0.400 -.0551688 .1383288

Credit Service
Yes | .032885 .0549441 0.60 0.549 -.0748033 .1405734

Telcom Service
Yes | .056323 .0384325 1.47 0.143 -.0190034 .1316493
MktDist | -.0096281 .0130755 -0.74 0.462 -.0352556 .0159995
-------------------------------------------------------------------------
Note: dy/dx for factor levels is the discrete change from the base level.

Table A7. Maximum likelihood estimates of logistic model and means marginal effects.

. margins, dydx (poor) atmeans

Conditional marginal effects Number of obs. = 288

Model VCE : OIM

Expression : Pr(poor), predict(poor)

-------------------------------------------------------------------------
Delta-method
| dy/dx Std. Err. z P>|z| [95% Conf. Interval]
---------------+---------------------------------------------------------
Sex
 Male | -.0015261 .0684452 -0.02 0.982 -.1356762 .1326241
Age | .0033432 .0043255 0.77 0.440 -.0051346 .011821

Marital Status
Married | -.1285147 .1182481 -1.09 0.277 -.3602768 .1032475

Educatn | -.1132986 .053784 -2.11 0.035 -.2187133 -.0078839

Illitra | -.1555982 .1094629 -1.42 0.155 -.3701415 .0589452

Fam_zeAE| -.0101544 .0313581 -0.32 0.746 -.0716151 .0513064

Child<14| -.2572459 .0435295 -5.91 0.000 -.3425622 -.1719296

Employment level
Employed| .0253012 .0816093 0.31 0.757 -.1346502 .1852525

TLU_AE | -.0034711 .0073993 -0.47 0.639 -.0179734 .0110313

PerCapIn| -.0001571 .0000239 -6.58 0.000 -.0002039 -.0001103

Marketplace Access
Yes | .0662557 .0736031 0.90 0.368 -.0780037 .2105152

Credit Service
Yes | .0596196 .1061532 0.56 0.574 -.1484368 .2676759

Telcom Service
Yes | .0917381 .060743 1.51 0.131 -.0273161 .2107923
MktDist | -.0162609 .0222048 -0.73 0.464 -.0597816 .0272597
-------------------------------------------------------------------------
Note: dy/dx for factor levels is the discrete change from the base level.
Appendix : Questionnaires
INTRODUCTION

Hello, my name is Anteneh Tadele. I am from Samara University conducting research on MSc
program on Developmental Economics. I conduct a study on “Determinant of Poverty in Aysaita
District in Afar Regional state” and would very much appreciate your help by agreeing to participate
in a brief interview. survey is being conducted to identify the determinant and intensity of poverty
status of households in the case of Aysaita District of the Afar Regional. Your family was randomly
selected to participate in study. You can be assured that your names and addresses was not be
revealed to outside individuals or organizations. The information that you give was remain absolutely
confidential.

questionnaire is prepared to assess “Determinant of Poverty in Aysaita District in Afar Regional

state” by Anteneh Tadele for the partial fulfilment of the award of master’s degree in developmental
economics.

Thank you very much for your time and cooperation in our survey.

Mobile: +251 925 227527 or +251 966-135 701 e-mails: anttad01@gmail.com

Would you be wasing to participate in interview? 1. Yes. 2. No

Date of interview: Time - Begin:______________ End:___________ Date:____________________

Part A: Household Demography

1. Name of interviewer:_________________________________
2. Address of the Household Demography
1. Amolederewa Kebele 2. Kulsi’coma kebele 3. Beri’daba kebele 4. Aberoberi’fagi kebele
3. Sex of the Household head
1. Male 2. Female
4. Age of the Household head
1. 18 to 24 2. 25 to 34 3. 35 to 44 4. above 45
5. What is your Marital Status?
A. Single 2. Married 3. Divorced 4. Widowed
6. Education level of the Household head
1. Illiterate 2. Primary Education 3. Secondary education 4. Higher education
7. Family Size of the Households? 1. 1 to 3 2. 4 to 6 3. 7 to 9 4. 10 to 12 5. >13
1. Number of household members aged between 0-14 years __________
2. Number of household members aged between 15-50 years __________
3. Number of household members aged 50 years and above____________

PART B. Economic Activity

8. Employment /Occupation of household head

1. Employed 2. Unemployed
9. If your response is Employed to Question 8, what is your main occupation?
1. Self-employed 2. Government employee 3.Private Employee 4.
NGO employee 5. Daily Laborer 6. Specify
others_________________
10. If your response is Unemployed, what is major income sources of the family?
1. Livestock sale 2. Crop sale 3. Trade 4. Land rent 5. Others
11. Does Your household have Agricultural land? 1. Yes 2. No
12. Does Your Household have livestock? 1. Yes 2. No

s/n 13. Please specify whether each of the 14. How many of the 15. Value of item
below listed items is present in your [item] does the (If you bought it, how
household. household own? much money did you
Note: 1. Yes 2. No spend on?
1 Agriculture land (hectares)
2 Cattle (Cow and Ox)
3 Sheep
4 Goat
5 Camel
6 Donkey
Total

16. What is the Primary aim/Insertion or Target of the household in Producing crops?
1. For Household Consumption 2. For Sell/Market 3. Both 4. Doesn’t produce
17. What is the Primary aim/Insertion or Target of the household in Producing livestock?
2. For Household Consumption 2. For Sell/Market 3. Both 4. Doesn’t produce
Part C. Income and Expenditure

18. Household’s monthly consumption expenditure(in Birr)____________________________

19. What is the current level of income situation for your family?
4. Meet all needs 2. Somehow meet 3. Not meet all needs 4. Don’t know
20. How did the financial status of your family change in the last year?
1. Much Worse 2. Worse 4. The same 5. Improved 6. Much improve. 7. Don’t
know
21. What is the average monthly income of your household during the last year?
1. >=2,000 ETB 2. 2,000 – 3,500 ETB 3. 3,500 – 5,000 ETB 4. >=5,000 ETB

PART D: Calorie intakes consumption for Food and non-food Items in last month for a family
of six individuals’ households.

s/n Food Items Calories per day by Average price per Food expenditure
Average consumption 1000 calories (ETB) per day (ETB)
A B C D = B*
1 Teff
2 Wheat
3 Maize
4 Sorghum
5 Onion
6 Red paper
7 Meat
8 Sugar &Salt
9 Milk
10 Oil
11 Coffee &tea
Total calories
Food poverty line (CBE)
s/n Non-Food Items Non-food expenditure per day (ETB)
Quantity Unit cost (ETB) Total cost (ETB)
1 Charcoal
2 Soap (Lifebuoy)
3 Wash soap (Boom)
4 Jelly (e.g. Vaseline)
5 Electricity (medium
density
6 Water (medium density)
7 Housing (medium
density)
Total cost of non-food
items
CBN poverty line (least-
cost)

22. Over the past one week (7 days), did you or 23. How much in total did your household consume
others in your household consume any [ITEM]? in the past week?
Include Food Both Eaten Communally in The
Household and Separately by Individual
Household.
s/n Name of items 1. Yes Quantity Unit cost (ETB) Total cost (ETB)
2. No
1 Teff
2 Wheat
3 Maize
4 Sorghum
5 Onion
6 Red paper
7 Meat
8 Sugar &Salt
9 Milk
10 Oil
11 Coffee &tea
Total Food Items
PART E. Access and Distance of the Market, Telecommunication and Credit Service

24. Have you got market access in your kebele? 1. Yes 2. No

25. Did you know the market price of crop/livestock before you sold/buy? 1. Yes 2. No
26. Do you have a bank account? 1. Yes 2. No 3. Not Applicable
27. What is the distance between you and your marketplace in km?___________________
28. Have you got a credit service in your financial institutions in your kebele?
 1. Yes 2. No 3. Not Applicable
29. If Yes Q30, do you purchase stocks on credit? 1. Yes 2. No
30. If No Q31, why did you get a credit service?
1. Lack of interest 2. No MFI 3. high interest rate 4. Specify others:_______
31. Do you have mobile phone for telecommunications capability? 1. Yes 2. No
32. If Yes Q33, did you use cell phone to access markets information on price and other costs?
1. Yes 2. No