How is the multidimensional poverty changing in Ethiopia? An empirical examination using demographic and health survey data

Abstract

Utilizing three recent waves of Demographic and Health Surveys data from nationally representative samples, this study employs the Alkire and Foster methodology to gauge the Multidimensional Poverty Index in Ethiopia. Examining various factors including living standards, healthcare, and education access, analysis extends to subpopulation groups. By employing an ordered probit model after data restructuring, trends and determinants of multidimensional poverty at national and sub-population levels are assessed. Key factors impacting multidimensional poverty include location, household head’s demographics (sex, literacy, and age), family size, land area, and region of residence. Despite a notable decrease in households in multidimensional poverty, vulnerability to poverty is on the rise. While multidimensional poverty remains predominantly rural, vulnerability in urban households escalates. Empirical evidence supports growing economic disparity in Ethiopia. Regional disparities are evident, with Somali and Afar regions being the hardest poverty hit. Household size demonstrates a non-linear effect on poverty. This study underscores practical and theoretical implications for poverty alleviation strategies.This article offers a critical analysis of multidimensional poverty in Ethiopia, employing data from the 2011, 2016, and 2019 Demographic and Health Surveys. By applying the Alkire and Foster methodology and an ordered probit model, the study highlights trends and determinants of poverty across different subpopulations. It reveals a concerning increase in the vulnerability of households, despite a decline in multidimensional poverty rates. The findings underscore stark urban-rural disparities and the regressive nature of poverty reduction, with wealthier groups disproportionately benefiting. Regional disparities are also emphasized, particularly in Somali and Afar regions, where poverty remains most severe. The study advocates for targeted, inclusive policy measures such as rural development programs, urban economic reforms, and gender empowerment initiatives. By identifying critical areas for intervention, this research informs policy development aimed at sustaining poverty reduction and preventing relapse into poverty, ensuring equitable benefits of economic growth across all segments of the population. The insights provided have significant implications for crafting effective poverty alleviation strategies and fostering sustainable development in Ethiopia.