Prices in the Measurement of Food Poverty in Urban Ethiopia

Course ID
Ethiopian Economics Association (EEA)
Abbi Mamo Kedir

Using the Ethiopian Urban Household Survey of 1994, we investigate the sensitivity of food poverty estimates to the choice of spatial price deflators. Our results caution against the use less careful procedures in estimating prices and price indices using household information on expenditures and quantities. Regional price indices calculated from official average prices for the main urban areas are compared with indices derived from household data-based unit values corrected for quality effects, units of measurement and selectivity bias. As measured by the headcount index, household food poverty rates vary from 23% (Bahar Dar) to 64% (Dessie) across main urban areas according to our preferred spatial price deflators while it varies from 16% (Bahar Dar) to 53% (Dessie) according to the deflator obtained using external price information. This shows that using official average prices rather than corrected household data-based prices substantially biases poverty downwards in other towns relative to Addis Ababa which has a headcount index of 33%. By all price measures, Dessie is the poorest city while Bahar Dar is the least poor. The differences between the poverty rates indicated by the external price measure and preferred measure are in the order of 7% (for the least food poor city) and 11% (for the most food poor city). The paper also examines the determinants of household welfare and food poverty using OLS, binary and quantile regression techniques. The models identify variables such as household composition, location, labour market status, asset ownership and level of schooling as important determinants.

Corporate Author: Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Publisher: Ethiopian Economic Association (EEA)
Primary Descriptors: Quality effects; local units; selectivity bias;
Secondary Descriptor: food poverty; spatial price deflators; poverty indices
Geographic Descriptors: , urban
Cataloge Date: 02/27/2013
Broad Subject heading: SOCIAL SECTOR ISSUES
Call Number: 330.963 PRO 2004
Serial Key Title: Proceedings of the First International Conference on the Ethiopian Economy
Publication catagory: International Conference
Content type: EEA Publication
Volume: III
Publication date: 2013-05-27 23:04:00
Forum or Discussion date: 2013-02-27 14:55:41
Place of publication: Addis Ababa, Ethiopia
Type of material: Book
Current frequency: Annualy
Author: Abbi Mamo Kedir and Richard Disney