Abstract

This paper analyses the extent and determinants of rural household poverty in the eastern highlands of Ethiopia. The study examines 216 households using a household consumption expenditure approach. The study was particularly interested in the effects of location-specific and institutional factors (networks) in determining the probability of being poor. The findings suggest that poverty is location-specific, depends on access to irrigated land (not land per se) and access to non-farm income. Results also indicate that household wellbeing is negatively affected by household size, and positively affected by age of household head. Involvement in governance, social and production related networks are also found to be strongly associated with the probability of a household being poor.

Key words: Rural poverty, ordered probit, institutional factors, Eastern Hararghe, Ethiopia.