Determinants of Household Poverty: Analysis of Multidimensional Aspect in Rural and Urban Areas in Amhara Regional State, Ethiopia

Abstract It would be easier for policymakers to create effective poverty-alleviation policies and programs for multi-deprived poor households if they were aware of the causes and extent of multidimensional household poverty. To that end, the study tried to measure the intensity, acuteness, and factors that can determine households’ multidimensional poverty in rural and urban areas. The study employed a Logit model to analyse the demographic and socio-economic characteristics of poor households. The MPI method was used to define a multidimensional poverty line threshold for the poor and non-poor. The poverty indices were used to analyse the incidence and intensity of multidimensional poverty among households. The findings of the study show that the multidimensional headcount ratio (H), intensity (or breadth) of poverty (A), and total Multidimensional Poverty Index (MPI) were found to be 0.47%, 0.43%, and 0.20% in urban areas and 0.81%, 0.48%, and 0.39% in rural areas, respectively, with much higher values for rural households. The results obtained from a binary logistic model indicate that a household’s education level, remittances, and house ownership were found to be negatively correlated with being poor. Besides, In rural areas, household marital status, livestock, and remittances were found to be negatively correlated with being poor. The variables HH size, sex, and total dependency ratio significantly affected HH falling into poverty, while other variables were not significant and rather inconclusive. The major findings of the study reveal that poverty exists severely in the region, especially in rural areas. This finding strongly supports the idea that multidimensional poverty can be improved in the region by focusing on education, stabilising food prices, and creating job opportunities.