LAUSR

Ethiopia has one of the highest poverty rates in the world where 24% of the population lives in extreme poverty. While urban poverty reduced from 26% in 2011 to 15% in 2016, rural poverty reduced only from 30 to 26% in the same periods. Improper identification of the rural poor and ill-understanding of the extent of rural poverty is among the challenges in designing appropriate poverty reduction interventions in rural areas. Thus, this study analyzes the extent of rural poverty employing a consumption-based approach and identifies the determinants of rural poverty at a household level. A household survey was conducted and data were randomly collected from 194 households from four representative villages in the west Belesa district of Ethiopia. The food and non-food consumption measurement calculated by the cost of basic need approach were 2949.40 ETB (ETB is Ethiopian Birr, which is the Ethiopian currency. 1 ETB is equivalent to 0.025 US$) and 1485.78 ETB per year per Adult Equivalent (AE), respectively. The rural poverty indices (i.e. headcount index, poverty gap, and squared poverty gap) calculated based on the consumption-based poverty line were 38.1, 8.84, and 3.1%, respectively. The binary logit analysis shows that having a bigger family had a significant and positive relationship with rural poverty. Conversely, larger landholding, plowing oxen, and livestock ownership as well as a higher amount of non/off-farm income have a significant and negative relationship with the poverty status of households. The study found that rural poverty is deep and complex in the study area calling for the design of location-specific and holistic poverty reduction strategies.