The incidence of poverty, in spite of a 5 percent increase between 1997 and 2000, has significantly remained the same. There is, however, a moderate but significant decrease in the depth and severity of poverty perhaps pointing to the positive impact of policy reform in the region. Decomposition results indicate that there are significant differences in
the geographic distribution of poverty. Moreover, zones with initially
highest level of poverty remained so during the period perhaps
indicating the presence of a geographic trap to poverty.
The analysis of the dynamics of poverty indicated that the proportion of
the people falling into poverty was far higher than those escaping
poverty, and people found initially in extreme poverty are found to have
difficulty of moving out of poverty. This underlines the chronic nature
of poverty in the region and the need for longer-term investments in the
poor while supporting those temporarily falling into poverty.
In the analysis of the determinants of poverty, human capital resources
such as members with primary and secondary education and households
educated heads and with any kind of acquired skills were found to have
higher welfare. Increased physical asset endowments, in terms of farm
size and livestock holding, are also positively related to improved
household welfare. These results underline the importance of enhancing
the poor's human and physical endowments in poverty reduction. On the
other hand, household labour endowment seems not to have generally
contributed to improvement in welfare perhaps underlining the poor
functioning of labour markets in the region.
This calls for policy measures that attack poverty through increased
investment for employment creation to tap on the existing idle labour
resource. Households' access to services was not found to have a
significant effect on welfare perhaps pointing to the limited effect of
these programs on poverty reduction in a remote, socially unstable and
Finally, regression results also show the adverse effects of village
level variables such as political risk (war) and weather factors
underlining the importance of peace and political stability and
investments in irrigation in poverty reduction. Better access to
markets, through investments in marketing infrastructure may also
contribute to poverty reduction, although it may leave poor households
vulnerable to external shocks until they are fully integrated into the
Rural household poverty dynamics in Northern Ethiopia 1997-2000. Analysis of determinants of poverty, presented at Staying Poor: Chronic Poverty and Development Policy, Institute for Development Policy and Management, University of Manchester, 7-9 April 2003. Chronic Poverty Research Centre (CPRC), Manchester, UK, 35 pp.
Rural household poverty dynamics in Northern Ethiopia 1997-2000. Analysis of determinants of poverty.