Determinants of poverty in rural households: Evidence from North-Western Ethiopia

Abstract

Even though poverty has decreased in recent years, it is still a challenge in Ethiopia especially in rural areas the rate of decrease is slower than the counterpart. Most rural livelihoods in the study area depend on rain-fed agriculture and their exposure to poverty and its risk factors not well documented. So, to fill this gap this study examined the extent and the major determinants of poverty at different levels of expenditure quantiles in the rural household of Bahir dar zuria district, Ethiopia. This study used the FGT index and quantile regression model. The determinants of rural household poverty were total family size, total land ownership, distance to market, non-off-farm income, and bad health status of the household head. It was found that the total family size and bad health status of the household head can increase the poverty of the rural household which is lower the standard of living of rural households. While the non-off-farm income can decrease the poverty of the rural household. Thus, to reduce the poverty of the rural household; government policies and programs should give more emphasis on family planning, the necessity of health insurance, and improving the service of health institutions to bring overall household welfare development. Moreover, it promotes rural households to participate in off-farm and non-farm livelihood activities beyond agriculture to diversify their employment.

Keywords

• ethiopia
• fgt index
• poverty
• quantile regression
• rural