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Ethiopia has seen dramatic poverty reduction in the last two decades, nearly halving between 1996 and 2016. Reaching the remaining quarter of the population still living in poverty will be challenging though, and so will preventing impoverishment among those living just above the poverty line. Climate change, conflict and the Covid-19 pandemic have left many people at risk of impoverishment and will continue to exacerbate chronic poverty. DEEP is working on innovations in data to measure extreme poverty, analysing of the main drivers of poverty in Ethiopia, and studying what works to reduce extreme poverty.

Projects in the country

Project 1: Understanding poverty dynamics in Ethiopia: Implications for the likely impact of Covid‐19

A synthetic panel data approach to study poverty and vulnerablity transitions pre-Covid-19 and assess likely impacts of Covid-19 on poverty dynamics in Ethiopia.

Project 2: Locating extreme poverty in Urban East Africa using advanced statistical methods

Exploring the extent to which information extracted from satellite images can help predict the distribution of extreme urban poverty in Ethiopia, Tanzania, and Mozambique.

Project 3: What works to reduce extreme poverty? A selective review

A selective review of what works to reduce extreme poverty in five countries, undertaken as part of DEEP’s inception phase.

Project 4: Evaluating and understanding the longer-term impacts of index based livestock insurance on pastoralists

Evaluating the welfare effects of behavioural insurance interventions among pastoralists in Southern Ethiopia.

There are around 50 million pasotralists in sub-Saharan Africa that rely on extensive rangeland for a large portion of their income. Repeated droughts have led to catastrophic income and asset loss, resulting in impoverishment and destituion. Index-based listock insurance policies have been sold in Ethiopia since 2012 but uptake has been low. This project has two research components. First, we are examining the longer-term impacts of livestock insurance on pastoralist welfare. Second: investigating the effectiveness of the addition of a novel behavioural intervention on both insurance uptake and subsequent impacts on welfare.

Project 5: Understanding the relationship between city size and poverty using small area estimation in Ethiopia

This study builds on earlier DEEP work locating extreme poverty using satellite images and explores the relationship between city size and poverty levels in Ethiopia. Earlier work by DEEP helped to locate extreme poverty in urban East Africa using satellite images. Interesting results emerged using available geo-spatial data derived from satellite images to predict poverty across three large urban areas, including Addis Ababa. This project builds on and extends this small area estimation work and explores the relationship between city size and poverty using satellite imagery. Existing understanding is based on traditional survey-based data and these are not well placed to shed light on the extent of poverty at the individual town and city level.

Poverty Trends in Ethiopia

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