DETERMINANTS OF POVERTY AND EXTENTS OF INCOME INEQUALITY IN ARBA MINCH TOWN, GAMO GOFA ZONE

Abstract

This study primarily aimed to examine Determinants of poverty and Extents of income inequality in Arba Minch town, Gamo Gofa zone using logistic regression model and Distributive Analysis/Analysis Distributive /DAD/ with the help of data collected from sample of 260 household heads, from four sub city, and the study area was selected purposively and from each kebele’s registry-frame, households were selected by random sampling techniques using systematic random sampling. By using Cost of Basic Need /CBN/ approach and DAD soft ware the general poverty line of study area was determined to be birr 679 per adult equivalent per month and, based on this bench mark, households were identified as poor and non-poor. With this poverty line, 27 % of populations in the study area were found to be poor with income short fall of 7.8 percent and poverty severity index of 3.15 percent. Logistic regression result revealed that family size, access to credit, household expenditure, marital status, education level, age and sex of household head were major determinants of poverty in the study area. The extent of income inequality in the study area was measured by Gini coefficient and computed by DAD soft was to be 0.44 with high inequality recorded. Poverty-income elasticity and poverty-inequality elasticity in Arba Minch was -2.43 and 0.44, respectively. Therefore, government promotes family planning; improve infrastructures and creating employment opportunity. In general, higher income inequality had been registered in Arba Minch, the poverty-income and poverty-inequality elasticity and the proportion of income and expenditure among the poor and non poor values had powers to draw attention to design development interventions aiming at increasing the income of the poor.