Economy

This study is aimed at examining the extent of urban household poverty using the FGT approach and the national poverty line as a reference. The data were collected from a representative of 316 sample households drawn from each respective kebeles using a combination of simple random sampling and systematic sampling techniques. The findings of the study showed that, the proportion of the poor people is estimated to be 46.8% indicating that almost half of the people in the study area were unable to meet the monthly per adult equivalent consumption expenditure of 315 ETB. The poverty severity index was also 37.4% in the study area while it was 2.9% and 3.2% at national level and in the region. The estimation result of the logit model also showed that, level of educational achievements, and household income was negatively and significantly correlated with the probability of being poor at 10% and 1% significance level respectively. Whereas, the variables that were positively and significantly correlated with the probability of being poor were larger family size, unemployment, not owning a house, and household health status/disease at 1%, 10%, 10%, and 1% level of significance respectively. Based on the result of the study, the following recommendation was made. Efforts should be made to raise the real income of households through well-paying and steady job creation by the setup of micro and small scale enterprises, with the increased provision of economic and social infrastructure of houses, education, and better water sanitation services for poverty reduction.