The Analysis of Poverty in Urban Ethiopia: The Case of North Wollo Zone of Amhara Regional State

Abstract

This study examined the factors that contribute to urban poverty in Amhara regional state's north Wollo zone. To address the objectives, Using the costs of basic needs approach, qualitative and quantitative data from primary and secondary sources is collected from 397 sampled households, and the poverty line of the study area is determined to be 2278.4 birrs. The FGT poverty index (Foster, Greer, and Thorbecke) is employed, and the headcount index, poverty gap, and severity indexes are estimated to be 19.39%, 9.17%, and 5.96%, respectively. The probit model is used to analyze the main determinants of poverty, and the estimation result of this model shows that being a house owner, having access to credit, being a participant in urban agriculture, and having premises are associated with a high probability of being non-poor, and years of education, family size, and dependency ratio positively contribute to poverty alleviation. Education has the power to alleviate poverty in society. So not only the government but also all the concerned bodies will participate in investments in any education sector to motivate individuals to join the school in mass, in contrast to migrating to Arab countries, and again, households must advise their children not to drop out of school.