Multidimensional Poverty and Its Dynamics in Ethiopia

Abstract

Traditional one-dimensional income or consumption expenditure-based poverty measures provide a biased and incomplete guide to addressing poverty. Recent research trends are shifting from one-dimensional to multidimensional poverty analyses. This paper uses Alkire and Foster (Understandings and misunderstandings of multidimensional 793 poverty measurement. Springer Science+Business Media, Berlin, 2011) method of multidimensional poverty analysis using data from four rounds of the Ethiopian Demographic and Health Survey. Our study concludes that multidimensional poverty is high in Ethiopia in general and in rural Ethiopia in particular. In Ethiopia, multidimensional poverty has been decreasing moderately over time but still a large proportion of its population is under the multidimensional poverty line. Living standards contribute the most (more than 85%) to multidimensional poverty while education contributes about 14% and health contributes the least (less than 1%). Among the indicators that this paper uses in multidimensional poverty, there is high deprivation in sanitation, cooking fuel, floor and electricity. Further, sanitation and cooking fuel deprivations are increasing but education deprivation and school attendance deprivation have been decreasing over time. Level of education, having a bank account and the number of working age family members reduce multidimensional poverty but the number of children under 5-years and dependent family members (dependency ratio) increase Ethiopian households’ multidimensional poverty.