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Vulnerability to Poverty in Ethiopia

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Efficiency, Equity and Well-Being in Selected African Countries

Abstract

In most literature income or consumption expenditure is regarded as a proxy for a household’s material well-being. However, economists have long recognized that a household’s well-being depends not only on its average income or consumption expenditure but also on the risks or vulnerabilities that it faces and its ability to deal with them. Hence, vulnerability is a more appropriate measure of welfare. This paper examines households’ vulnerability to poverty in Ethiopia. It uses household cross-sectional surveys to estimate the extent of vulnerability as expected poverty. The unidimensional vulnerability measure using consumption expenditure shows that 38 percent of the population was vulnerable to poverty. Rural households’ vulnerability was relatively higher as compared to the vulnerability in urban areas. A multidimensional vulnerability estimate (89 percent) was markedly different from the one-dimensional vulnerability estimate (38 percent). The distribution of vulnerability across different segments of the population can differ from the distribution of poverty. We argue that this highlights the need for a distinction between poverty prevention (vulnerability) and poverty alleviation programs. Rich households’ vulnerability to multidimensional poverty stems mainly from the volatility in deprivation scores, but poor households’ vulnerability is mainly because of high deprivation scores. Households who are poor at any given point in time may differ from those who are vulnerable to poverty. Therefore, interventions and programs that are targeted at reducing vulnerability levels in the population need to be addressed differently from those aimed at poverty alleviation.

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Author information

Authors and Affiliations

  1. Department of Economics, Addis Ababa University, Addis Ababa, Ethiopia

    Getu Tigre

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  1. Getu Tigre
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Editors and Affiliations

  1. Jönköping International Business School (JIBS), Jönköping University, Jönköping, Sweden

    Pia Nilsson

  2. Jönköping International Business School (JIBS), Jönköping University, Jönköping, Sweden

    Almas Heshmati

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Tigre, G. (2019). Vulnerability to Poverty in Ethiopia. In: Nilsson, P., Heshmati, A. (eds) Efficiency, Equity and Well-Being in Selected African Countries. Economic Studies in Inequality, Social Exclusion and Well-Being. Springer, Cham. https://doi.org/10.1007/978-3-030-11419-0_4

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