Evolution of Wellbeing in Ethiopia

By Ibrahim Worku Hassan

International Food Policy Research Institute-Ethiopian Strategy support Program II

March 30, 2011

Content

• Introduction• Literature • Data• Descriptive• Concluding Remark• Extensions

IntroductionMotivation• To complement what has been done by Alemayehu

and Kibrom (2010)• As an extension: it capture some salient futures of

the livelihood of the poor across different socio-economic group over time horizon

• To see whether there is an improvement in the living standard over time

Literature• Benerjee and Duflo (2006) made cross country comparison

on the wellbeing of rural and urban poor households• The authors describe sources of income and consumption

behaviors of the poor• Also focus on: what they call ‘apparent anomalous choices’

that the poor made* significant potion of the poor, both in Urban & Rural area,

own Land: Tanzania, India - Udaipur and Panama Television : Nicaragua, Panama, Indonesia, Cote d'Ivoire Radio: South Africa, Nicaragua, Peru * consumption observed irregularity in the consumption behavior of the

poor which is beyond expectation

Literature (Cont.)

• Alemayehu and Kibrom (2010) • Used national, quintile, urban and rural classification• Expenditure patterns : observed upward trend with

some fluctuation in real per capita expenditure, over time by household group and location;

• Calorie intake show slight decline

• * mixed result regarding consumption behavior

• Assets – radios, bicycles, mobile phones Show increment

• In this study: the analysis extends to poor non/poor classification for national and urban -rural clusters; It also includes some additional dimensions in each section

The DataThe data source is HICES and WMS surveys

which is collected by CSA for the periods• 1995/96,• 1999/00• 2004/05The data set is nationally representativeHICES and WMS together capture various

dimensions: from demographic to consumption and infrastructure and facilities…

Method

• Descriptive tables• Comparison is made • across groups * National * Rural and Urban Households * 5 quintiles of expenditure groups * Poor/non-poor-National classification (based on

quintiles of expenditure groups) * Poor/non-poor-Urban/Rural classification• over three survey

1) Household size• Average household size continually declines across the 5

expenditure quintile groups• the poorest section mean household size increases for

both urban and rural group• urban population mean hhsize declined for the remaining 4

quintiles, • rural people of the 3rd, 4th and 5th quintile group mean hh

size also show a declining pattern

1996 1999 2004 1996 1999 2004 1996 1999 2004 1996 1999 2004 1996 1999 2004Qi1 Qi2 Qi3 Qi4 Qi5

0

1

2

3

4

5

6

7

Average Household Size UrbanAverage Household Size Rural

2) Expenditure sharesA) Total Consumption• real per capita expenditure has shown ups and

downs over the survey periods; true even for the urban non-poor except for the top 5th quintile group

1996

1999

2004

1996

1999

2004

1996

1999

2004

1996

1999

2004

Urban Rural Urban RuralPoor Non-poor

0

500

1000

1500

2000

2500

Real Per capita expenditure

Real Per capita expendi-ture

1996

1999

2004

1996

1999

2004

1996

1999

2004

1996

1999

2004

1996

1999

2004

qi1 qi2 qi3 qi4 qi5

0

500

1000

1500

2000

2500

Real Per capita expenditure

Real Per capita expendi-ture

Expenditure share by Category

• Expenditure share for food consistently declined while non-food expenditure increased

• Expenditure on festivals, education, health, alcohol and tobacco accounts only about 5 over the period;

1996 1999 2004 1996 1999 2004 1996 1999 2004 1996 1999 2004Urban Rural Urban Rural

Poor Non-poor

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Non-FoodFestivalsEducationHealthAlcohol & TobaccoFood

Pattern of Expenditure shares of the four marginal commodities• Expenditure on education has increased in urban and rural

areas• In general, we can say that spending on festivals is also

increasing. • Expenditure share on health slightly declined for rural

population and urban poor.

ur1996 ur1999 ur2004 ru1996 ru1999 ru2004 ur1996 ur1999 ur2004 ru1996 ru1999 ru2004Urban Rural Urban Rural

Poor non-poor

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Alcohol & TobaccoHealthEducationFestivals

Calorie intake

• Average daily calorie intake has increased for the rural poor and non-poor population

• The urban poor and non-poor faced a decline in their daily calorie intake for the period 1999 but improved in 2004.

• If we look at the recent 2004, even the poor straggle hard to meet the minimum average daily calorie requirement.

ur1996 ur1999 ur2004 ru1996 ru1999 ru2004 ur1996 ur1999 ur2004 ru1996 ru1999 ru2004Urban Rural Urban Rural

Poor Non-Poor

0

500

1000

1500

2000

2500

3000

Series1

Asset Ownership: Land and housing• More than 95 of rural hhds, poor/non-poor, claimed to have land and

housing• Whereas only around 60-50 report to have land or house in urban

areas • The proportion of hhds who claimed to have land has declined in

both urban and rural areas• No distinction b/n poor& non poor

Percentage of households who

own land

Own land Yes No

Poor Urban

1996 61.97 38.03

1999 54.83 45.17

2004 52.27 47.73

Rural

1996 96.63 3.37

1999 95.20 4.80

2004 97.30 2.70

Non-PoorUrban

1996 60.65 39.35

1999 58.12 41.88

2004 56.73 43.27

Rural

1996 97.32 2.68

1999 95.66 4.34

2004 96.80 3.20

ur19

96ur

1999

ur20

04ru

1996

ru19

99ru

2004

ur19

96ur

1999

ur20

04ru

1996

ru19

99ru

2004

urban rural urban ruralpoor non-poor

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OthersRentFree of ChargeOwned

Asset: Summary• Tells us the profile of poor and non-poor across rural and urban household• Poor tend to own less of asset category one (Urban Assets) and ,in general, more of asset category two

(Rural asset) and vice versa

Urban/Rural Quintiles poor/non-poor_ nationalAsset category_1 National Urban Rural q1 q2 q3 q4 q1 poor non-poor

Radio 0.288 0.762 0.199 0.196 0.213 0.240 0.315 0.485 0.204 0.346Television 0.038 0.224 0.003 0.020 0.021 0.019 0.035 0.096 0.021 0.050Bicycle 0.011 0.051 0.003 0.006 0.005 0.005 0.012 0.027 0.006 0.015Sofa set 0.029 0.165 0.003 0.015 0.014 0.017 0.026 0.072 0.015 0.038Table and Chair 0.527 1.765 0.292 0.336 0.374 0.421 0.609 0.909 0.355 0.645Video deck 0.014 0.081 0.001 0.006 0.006 0.006 0.010 0.042 0.006 0.019Refrigerator 0.010 0.063 0.000 0.004 0.004 0.005 0.008 0.029 0.004 0.014Car 0.005 0.028 0.001 0.002 0.001 0.002 0.004 0.016 0.002 0.007Jewellery 0.000 0.002 0.000 0.000 0.000 0.000 0.001 0.000 0.000 0.000Asset category_2

Cattle 0.949 0.204 1.121 0.990 1.044 1.074 0.965 0.685 1.016 0.904Sheep and goats 2.065 0.500 2.363 2.398 2.250 2.414 1.939 1.302 2.325 1.887Chicken/Poultry 2.453 0.723 2.782 2.855 2.600 2.659 2.383 1.743 2.730 2.263Plough animal 0.818 0.098 0.955 0.836 0.863 0.945 0.852 0.592 0.849 0.797Pack animal 0.112 0.022 0.129 0.098 0.112 0.130 0.122 0.097 0.105 0.117Equines 0.296 0.035 0.345 0.297 0.328 0.341 0.308 0.204 0.312 0.284Mofer and Kember 0.984 0.094 1.153 1.113 1.040 1.116 0.963 0.677 1.077 0.919plough 0.645 0.090 0.751 0.685 0.703 0.724 0.642 0.469 0.694 0.612Sickle 1.258 0.301 1.440 1.390 1.388 1.412 1.246 0.844 1.389 1.168

Source of Income

• Rural households mainly depend on agriculture• the urban poor and non-poor have lots of income generating

mechanism: urban agriculture as a source of income is also increasing Poor Non-Poor

Source of Income Urban Rural Urban Rural ur1996 ur1999 ur2004 ru1996 ru1999 ru2004 ur1996 ur1999 ur2004 ru1996 ru1999 ru2004

Agricultural enterprise 8.42 11.15 13.88 59.54 92.26 92.96 6.13 6.62 7.93 63.12 94.07 92.93

Household enterprise 39.14 28.43 30.64 9.10 1.76 3.50 36.91 26.22 31.62 9.61 1.57 3.26Remittance / Transfer government 31.06 4.60 7.20 10.32 0.36 1.10 41.40 7.71 7.18 10.36 0.28 1.03

Collected free (wood,Water, ...) 17.63 0.97 16.73 0.33 12.96 0.19 14.13 0.24Wages and salaries 3.75 37.21 31.12 4.13 2.75 1.19 2.59 42.35 41.46 2.66 2.37 1.64

Pension/social security 0.00 5.22 8.08 0.19 0.16 0.04 0.01 5.55 5.45 0.11 0.11 0.21Saving 0.33 0.00 0.46 0.03

Interests and royalties 0.16 0.02 0.04 0.05Dividends 0.34 0.12 0.00 0.04 0.18 0.05 0.00 0.07Rent 1.87 2.88 0.02 0.17 3.68 2.65 0.05 0.11Income from rent 0.15 0.18 0.02 0.17 0.15 0.08 0.03 0.11Sale of fixed assets 10.98 0.21 2.68 0.00 7.65 0.30 1.54 0.02Other current transfers 0.19 4.41 0.01 0.65 0.03 2.68 0.00 0.41

Ability to read and write

• In both urban and rural areas %age of households who can read and write has increased over the periods

1996 1999 2004 1996 1999 2004 1996 1999 2004 1996 1999 2004Urban Rural Urban Rural

Poor Non-Poor

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

no

yes

Ability to get 100 birr per week

• Percentage of household who can get 100birr during emergency across quintiles has increased

• But in 2004 those who respond positively declined for all quintile groups

qi1 qi2 qi3 qi4 qi5 qi1 qi2 qi3 qi4 qi51999 2004

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

Yes No

Sources of Light and drinking water• Rural poor and non-poor dependence on kerosene has increased

over time while the urban counter part shifted to electricity• Rural poor and non-poor reliance on river, lake and pond declined

and sifted towards unprotected well/spring and public tap• While in urban areas there is a shift to use public tap than other

sources

ur1996

ur1999

ur2004

ru1996

ru1999

ru2004

ur1996

ur1999

ur2004

ru1996

ru1999

ru2004

Urba

nRu

ral

Urba

nRu

ral

Poor

Non-

Poor

0.00% 50.00% 100.00%

Kerosin

Electric _Private

Electric Shared

wood

Candle/Kerosin Lamp

Others/not stated

ur19

96

ur19

99

ur20

04

ru19

96

ru19

99

ru20

04

ur19

96

ur19

99

ur20

04

ru19

96

ru19

99

ru20

04

Urban Rural Urban RuralPoor Non-poor

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Own Tap

Public Tap

Protected well/spring

Unprotected well/spring

River, Lake, Pond

Others/Not Stated

Households perception in 2004• About 40 to 50% of households kept their status quo • 20-30% report that they did a little better• Roughly, 20-30% felt worse in food and overall living standard• Only few did much better ( less than 3% for all classification)

Living standard of %age of HH now compared with 12mn ago wrt...

clothing food overall

urban rural urban rural urban rural

poornon-poor poor

non-poor poor

non-poor poor

non-poor poor

non-poor poor

non-poor

Much worse 6.69 2.48 8.90 5.15 10.06 4.25 13.81 8.41 10.74 4.65 12.97 7.94Less worse 18.45 13.42 26.46 21.72 22.25 16.06 33.38 28.54 23.78 17.96 31.52 25.95Same 52.03 51.98 41.91 42.08 47.17 52.90 28.15 31.41 41.48 45.55 29.89 30.72A little better 21.64 29.50 21.13 29.64 19.15 23.94 23.21 29.41 22.54 29.07 23.92 33.43Much better 1.19 2.62 1.60 1.42 1.37 2.85 1.45 2.23 1.46 2.77 1.70 1.95

Distance to publicly provided facilities• %age of households who live at a distance less than 1km to publicly

provided facilities has increased

age of hhds with distance in kilometer to… Facility Year < 1 2-4 5-9- 10-14 15-19 20-99

Primary school1996 40.85 29.29 21.09 5.62 1.92 1.221999 34.27 42.60 18.45 3.31 0.97 0.392004 72.28 14.68 10.29 1.46 0.61 0.69

Secondary school1996 10.65 7.55 15.20 9.26 13.37 43.961999 8.69 11.63 16.46 13.64 12.41 37.172004 33.62 4.18 10.10 8.22 8.68 35.19

Food Market1996 25.53 20.71 31.94 10.28 7.31 4.221999 23.56 30.69 28.19 11.45 4.98 1.122004 58.30 10.47 18.82 6.97 2.03 3.41

Post office1996 12.28 6.41 18.00 12.25 15.41 35.651999 8.67 9.44 18.46 13.96 14.46 35.022004 34.25 3.71 11.33 7.02 9.16 34.53

All Weather road1996 1999 38.81 19.31 14.65 9.14 8.41 9.672004 68.26 6.46 7.91 2.81 4.47 10.10

Facilities by U/R classification• Access to facilities to rural

households significantly improved over these survey periods

• There is no significant variation across quintile groups

• Since the poor and non-poor are living side by side the distinction is not significant for such classification

age of household who live at a distance in

kilometer < 1 2-4 5-9- 10-14 15-19 20-99

Primary school

Urban1996 90.98 8.55 0.40 0.00 0.00 0.081999 77.94 20.84 1.08 0.03 0.01 0.102004 89.44 9.77 0.56 0.23 0.00 0.00

Rural1996 31.89 33.00 24.79 6.63 2.26 1.421999 27.64 45.91 21.09 3.80 1.12 0.442004 67.84 15.95 12.81 1.77 0.76 0.87

Secondary school

Urban1996 60.17 25.48 5.33 1.24 2.10 5.671999 47.90 38.21 8.00 0.13 1.36 4.402004 63.05 16.25 7.08 0.59 3.90 9.13

Rural1996 1.80 4.35 16.96 10.70 15.38 50.811999 2.74 7.60 17.74 15.69 14.08 42.142004 27.58 1.70 10.73 9.79 9.66 40.53

Food Market

Urban1996 84.73 11.02 3.94 0.28 0.03 0.001999 68.35 26.46 5.02 0.03 0.00 0.132004 86.48 10.79 2.41 0.20 0.08 0.05

Rural1996 14.95 22.44 36.95 12.07 8.61 4.981999 16.76 31.34 31.71 13.19 5.74 1.272004 51.35 10.39 22.87 8.65 2.51 4.24

Post Office

Urban1996 71.03 15.28 4.97 2.48 0.64 5.601999 52.83 31.24 6.85 0.87 1.38 6.832004 68.33 12.43 7.19 2.35 4.36 5.35

Rural1996 1.78 4.82 20.33 14.00 18.05 41.021999 1.97 6.14 20.22 15.95 16.44 39.292004 27.51 1.98 12.15 7.94 10.11 40.31

All Weather Road

Urban1996 1999 94.12 3.94 1.12 0.19 0.46 0.172004 96.26 1.74 0.17 0.17 0.01 1.65

Rural1996 1999 26.01 17.98 17.49 10.64 12.45 15.432004 56.43 5.49 10.16 5.33 3.96 18.63

Concluding Remark • Average household size has shown declining trend• Real per capita expenditure improved over the periods• Share of food consumption declined • Average daily calorie intake improved • Accessibility to facilities has improved• Expenditure on festivals and education has slightly

improved• Having land/house doesn’t guarantee a household form

being poor• According to 2004 survey, Most households, 40-50%,

maintained their status-quo, %age of and rural households who felt much worse are twice their urban counter parts

• On average, wellbeing has improved

Caveats

• Bench mark when a new HICES and WMS data are released and the comparison will make even more sense

• Requires regression analysis * Oaxaca Decomposition

Questions and Comments?

Thank You !!