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Intensity and Determinants of Rural Poverty in Banja District of Awi Zone, Amhara National Regional State, Ethiopia

Received: 25 March 2020     Accepted: 11 May 2020     Published: 29 May 2020
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Abstract

Poverty is one of the most serious problems of human deprivation and a complex phenomenon. Ethiopian government have been implementing different poverty reduction programs and strategies to fight extreme hunger and poverty. The struggle to reduce rural poverty at household level is a continuing challenge. This study was conducted in Banja district of Awi zone Amhara regional state. The specific objectives of this study were to estimate the rural poverty status, to identify factors determining rural poverty and to estimate the average exit time of poor households. In order to achieve these objectives, cross sectional data on human capital, physical capital, financial capital, natural capital and other institutional characteristics were collected from 190 households drawn from randomly selected five kebeles using structured household questioner. Descriptive and inferential statistics, and econometric model were used to analyze data on poverty status and poverty level, respectively. Hence, setting the poverty line, identifying poor and non-poor rural households, measuring the incidence, depth and severity, and mean comparison between the groups were made. Accordingly, using Cost of Basic Needs approach, the estimated poverty line was Birr 4301 per adult equivalent per year. The Foster Greer and Thorbeck measure of poverty found that 44 percent of sample households were found below poverty line and the poverty gap and poverty severity were 9 percent and 2 percent, respectively. The estimated average exit time of the poor households based on the five-year average per capita Gross Domestic Product growth rate was 3.35 years. Tobit model result showed that household size significantly and positively influence poverty whereas number of livestock and oxen ownership, educational level of the household head, input utilization, asset ownership and credit utilization negatively influenced poverty in the study area. The result suggests that improving adult education, provision of input for smallholder farmers, improving access and availability of credit, improving the livestock sector will be important policy interventions.

Published in International Journal of Agricultural Economics (Volume 5, Issue 3)

This article belongs to the Special Issue Agricultural Economics and Its Related

DOI 10.11648/j.ijae.20200503.11
Page(s) 49-62
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Rural Poverty, Banja, Determinant, Tobit

References
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[2] FAO (Food and Agricultural Organization). 2015. The State of Food and Agriculture: Social Protection and Agriculture; Breaking the cycle of Rural poverty. Rome, Italy.
[3] WB (World Bank). 2015. Policy Research Working Paper, Washington D. C. USA.
[4] IFAD (International Fund for Agricultural Development). 2011. Rural Poverty Report: New Realities, New Challenges, New Opportunities for Tomorrow’s Generation.
[5] Teshome Kebede and Sharma, M. K. 2014. Determinants of Poverty in Ethiopia. Ethiopia Journal of Economics, 13 (1): 114 -130.
[6] UNDP (United Nations Development Program). 2016. Human Development Report. Human Development for everyone, New York, USA.
[7] Husmann, C. 2016. Marginality as a Root Cause of Poverty: Identifying Marginality Hotspots in Ethiopia. World Development, 78 (C): 420-435.
[8] Ahmed Mohamed. 2013. Determinants of Poverty in Rural Ethiopia: A Household Level Analysis. MSC Thesis, Lund University, Lund, Sweden.
[9] WB (World Bank). 2016. Priorities for Ending Extreme Poverty and Promoting Shared Facility: Systemic Country Diagnostic. World Bank, Washington D. C, USA
[10] NBE (National Bank of Ethiopia). 2017. Annual Report, Addis Ababa, Ethiopia.
[11] CSA (Central Statistics Authority). 2007. Intercensal Population Survey, Addis Ababa, Ethiopia.
[12] Banja district agricultural offices, Unpublished.
[13] Yamane, T. 1967. Statistics, An Introductory Analysis, 2nd Edition. New York.
[14] EHNRI (Ethiopian Health and Nutrition Research Institute), 2000. Food Composition Table for Use in Ethiopia. Addis Ababa. Ethiopia
[15] Morduch, J. 1998. Poverty, Economic Growth, and Average Exit Time. Economics Letters, 59 (3): 385-390.
[16] Johnston, J. and Dandiro, J. 1997. Econometrics Methods, fourth Edition, New York: McGraw Hill Companies, Inc.
[17] McDonald, J. and Moffitt, R. 1980. The Use of Tobit Analysis. The Review of Economic and Statistics, 62 (2): 318 -321.
[18] Tobin, J. 1958. Estimation of Relationships for Limited Dependent Variables, Econometrcia 26: 24-36.
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[20] NPC (National Planning Commision). 2017. Ethiopia's Progress Towards Eradicting Poverty: An intrim Report on 2015/16 Poverty Analysis Study. Addis Ababa, Ethiopia.
[21] Scoones, I. 1998. Sustainable Rural Livelihoods: A Framework for Analysis. International Development Studies Working Paper.
[22] WBI (World Bank Institute). 2005. Introduction to Poverty Analysis: Poverty Manual, All, JH Revision.
[23] Tsegaye Molla, 2014. Analysis of Rural Poverty and Exit Time: The Case of Gozamen District of East Gojiam Zone, Ethiopia. Journal of Economics and Development, 5 (27): 310-320.
[24] Adane Nabso. 2002. Magnitude and Determinants of Rural Household Poverty in Central Ethiopia: The case of Berehe Aleltu District. M. Sc Thesis, Haramya University, Haramaya, Ethiopia
[25] Tassew Woldehanna and Tekie Alemu. 2002. Profiles and Determinants of Poverty. Paper Presented at an International Seminar of Development Strategies for Less Favored Areas. Wageningen, Netherlands.
[26] Ayalneh Bogale, Konard, H. and Benedikt, K. 2005. Determinants of Poverty in Rural Ethiopia. Quarterly Journal of International Agriculture, 44 (44): 101-120.
[27] Degye Goshu. 2013. The Dynamics of Poverty and Vulnerability in Rural Ethiopia. Ethiopian Journal of Economics, 22 (2): 1-20.
[28] Ayalneh Bogale and Abebaw Shemles. 2009. Household Level Determinants of Food Insecurity in Rural Areas of Dire Dawa, Eastern Ethiopia. African Journal of Food, Agriculture, Nutrition and Development, 9 (9): 1914-1926.
[29] Girma Gezimu. 2012. Determinants of Food Insecurity Among Households in Addis Ababa City, Ethiopia. Journal of Interdisciplinary Description of Complex Systems, 10 (2): 159-173.
[30] Asogwa, B., Ummeh, J. and Okwoche, V. 2012. Estimating the Determinants of Poverty Depth among the Peri-Urban Farmers in Nigeria. Current Research Journal of Social Sciences, 4 (3): 201-206.
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  • APA Style

    Desalegn Teshale Woldie, Jema Haji, Abule Mehare. (2020). Intensity and Determinants of Rural Poverty in Banja District of Awi Zone, Amhara National Regional State, Ethiopia. International Journal of Agricultural Economics, 5(3), 49-62. https://doi.org/10.11648/j.ijae.20200503.11

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    ACS Style

    Desalegn Teshale Woldie; Jema Haji; Abule Mehare. Intensity and Determinants of Rural Poverty in Banja District of Awi Zone, Amhara National Regional State, Ethiopia. Int. J. Agric. Econ. 2020, 5(3), 49-62. doi: 10.11648/j.ijae.20200503.11

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    AMA Style

    Desalegn Teshale Woldie, Jema Haji, Abule Mehare. Intensity and Determinants of Rural Poverty in Banja District of Awi Zone, Amhara National Regional State, Ethiopia. Int J Agric Econ. 2020;5(3):49-62. doi: 10.11648/j.ijae.20200503.11

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  • @article{10.11648/j.ijae.20200503.11,
      author = {Desalegn Teshale Woldie and Jema Haji and Abule Mehare},
      title = {Intensity and Determinants of Rural Poverty in Banja District of Awi Zone, Amhara National Regional State, Ethiopia},
      journal = {International Journal of Agricultural Economics},
      volume = {5},
      number = {3},
      pages = {49-62},
      doi = {10.11648/j.ijae.20200503.11},
      url = {https://doi.org/10.11648/j.ijae.20200503.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20200503.11},
      abstract = {Poverty is one of the most serious problems of human deprivation and a complex phenomenon. Ethiopian government have been implementing different poverty reduction programs and strategies to fight extreme hunger and poverty. The struggle to reduce rural poverty at household level is a continuing challenge. This study was conducted in Banja district of Awi zone Amhara regional state. The specific objectives of this study were to estimate the rural poverty status, to identify factors determining rural poverty and to estimate the average exit time of poor households. In order to achieve these objectives, cross sectional data on human capital, physical capital, financial capital, natural capital and other institutional characteristics were collected from 190 households drawn from randomly selected five kebeles using structured household questioner. Descriptive and inferential statistics, and econometric model were used to analyze data on poverty status and poverty level, respectively. Hence, setting the poverty line, identifying poor and non-poor rural households, measuring the incidence, depth and severity, and mean comparison between the groups were made. Accordingly, using Cost of Basic Needs approach, the estimated poverty line was Birr 4301 per adult equivalent per year. The Foster Greer and Thorbeck measure of poverty found that 44 percent of sample households were found below poverty line and the poverty gap and poverty severity were 9 percent and 2 percent, respectively. The estimated average exit time of the poor households based on the five-year average per capita Gross Domestic Product growth rate was 3.35 years. Tobit model result showed that household size significantly and positively influence poverty whereas number of livestock and oxen ownership, educational level of the household head, input utilization, asset ownership and credit utilization negatively influenced poverty in the study area. The result suggests that improving adult education, provision of input for smallholder farmers, improving access and availability of credit, improving the livestock sector will be important policy interventions.},
     year = {2020}
    }
    

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  • TY  - JOUR
    T1  - Intensity and Determinants of Rural Poverty in Banja District of Awi Zone, Amhara National Regional State, Ethiopia
    AU  - Desalegn Teshale Woldie
    AU  - Jema Haji
    AU  - Abule Mehare
    Y1  - 2020/05/29
    PY  - 2020
    N1  - https://doi.org/10.11648/j.ijae.20200503.11
    DO  - 10.11648/j.ijae.20200503.11
    T2  - International Journal of Agricultural Economics
    JF  - International Journal of Agricultural Economics
    JO  - International Journal of Agricultural Economics
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    EP  - 62
    PB  - Science Publishing Group
    SN  - 2575-3843
    UR  - https://doi.org/10.11648/j.ijae.20200503.11
    AB  - Poverty is one of the most serious problems of human deprivation and a complex phenomenon. Ethiopian government have been implementing different poverty reduction programs and strategies to fight extreme hunger and poverty. The struggle to reduce rural poverty at household level is a continuing challenge. This study was conducted in Banja district of Awi zone Amhara regional state. The specific objectives of this study were to estimate the rural poverty status, to identify factors determining rural poverty and to estimate the average exit time of poor households. In order to achieve these objectives, cross sectional data on human capital, physical capital, financial capital, natural capital and other institutional characteristics were collected from 190 households drawn from randomly selected five kebeles using structured household questioner. Descriptive and inferential statistics, and econometric model were used to analyze data on poverty status and poverty level, respectively. Hence, setting the poverty line, identifying poor and non-poor rural households, measuring the incidence, depth and severity, and mean comparison between the groups were made. Accordingly, using Cost of Basic Needs approach, the estimated poverty line was Birr 4301 per adult equivalent per year. The Foster Greer and Thorbeck measure of poverty found that 44 percent of sample households were found below poverty line and the poverty gap and poverty severity were 9 percent and 2 percent, respectively. The estimated average exit time of the poor households based on the five-year average per capita Gross Domestic Product growth rate was 3.35 years. Tobit model result showed that household size significantly and positively influence poverty whereas number of livestock and oxen ownership, educational level of the household head, input utilization, asset ownership and credit utilization negatively influenced poverty in the study area. The result suggests that improving adult education, provision of input for smallholder farmers, improving access and availability of credit, improving the livestock sector will be important policy interventions.
    VL  - 5
    IS  - 3
    ER  - 

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Author Information
  • Agricultural Economics Research Directorate, Ethiopian Institute of Agricultural Research (EIAR), Pawe Research Centre, Pawe, Ethiopia

  • School of Agricultural Economics & Agri-business Management, Haramaya University, Haramaya, Ethiopia

  • School of Agricultural Economics & Agri-business Management, Haramaya University, Haramaya, Ethiopia

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