Non-Monetary Poverty in Ethiopia: Multidimensional Approach

Abstract

This paper estimates the non-monetary multidimensional poverty index for Ethiopia using the Alkire and Foster (2011) counting approach. We use the 2016 Demographic Household Survey (DHS). Fourteen country-specific indicators are used to estimate the non-monetary multidimensional poverty with equal and unequal weighting approaches. The estimation with unequal weighting gives a much higher level of MPI compared to the equal weighting approach. Our results also show that cooking fuel, electricity, housing and women's literacy are more relevant indicators, which contributes much to compared with other indicators, for multidimensional poverty in Ethiopia. The contribution of place of delivery, domestic violence and women’s right to make decision is not also minimal. We also find that the multidimensional poverty index estimation depends on the specific weighting method used, the number of dimensions and indicators selected for estimation and the cross-dimensional cut-off applied.

Hence, policies which lessen poverty through improving cooking fuel, electricity, housing and women's literacy, particularly focused on rural areas, are needed. In addition, application of unequal weighting, which enable to see the trade-off between dimensions, is better to find out the indicators in which the society is more deprived rather than equal weighting.

Keywords: Multidimensional Poverty, Counting approach, unequal weighting, Demographic Household Survey, Ethiopia

JEL Classification: D04, D10, D60