The Effect of Drought on Urban Poverty: The Case of Addis Ababa

Course ID
Ethiopian Economics Association (EEA)
Esubalew Alehegn

The objective of the study was to analyze the effects of drought, measured by rainfall variability, on urban poverty taking Addis Ababa as a case. To this time series data, consisting three different periods, were used and estimated stepwise in three equations. The first equation, with years 1980-2005, estimated the amount of agricultural productivity using rainfall variability, fertilizer utilization, and agricultural expenditure by government as explanatory parameters. The second equation, years 1973-2003, examined impacts of the country’s agricultural output, population growth, food aid, food import, and food export, on food price. The third equation, spanned in 1976-1978 and 1990-1999, computed the effects of change in food price on the number of the poor in the city. Addis Ababa, the only metropolitan city, was taken for a case with the assumption that the city would reflect real picture of urban centers and, hence, is better representative of all other urban areas in the country. The Dickey Fuller and Augmented Dickey Fuller unit root tests were used to verify the stationarity of data while the Johansen maximum likelihood co integration test was employed to check existence of long run relationship among variables. The result indicated that agricultural output in Ethiopia was directly proportional to and determined by the amount of rainfall variability. In the first equation we found that rainfall variability has significantly affected agricultural output at 5% level while fertilizer, expenditure on agriculture, and land have each impacted productivity at 1%,5%,and 10% level respectively. The food price in Addis Ababa was inversely proportional to the agricultural output and was found robust at 1% level. The current period and second period lag value of the food price in the city was also found significant in affecting the number of the poor in the city at 5% level. On the other hand, long run food price in the city was found highly responsive to factors that affect food demand (population growth and income) than variables that impacted food supply (agricultural production, food aid, and food import).Of the variables envisaged to affect food price, domestic agricultural production brought the highest elasticity coefficient. This suggests the need that interventions geared to improve food supply and, hence, food price in the city ought to focus on improving domestic agricultural production than increasing food import

Corporate Author: Getnet Alemun & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Publisher: Ethiopian Economic Association (EEA)
ISBN/ISSN: 978-99944-54-14-7
Primary Descriptors: Effect, Drought

Secondary Descriptor: Urban Poor

Geographic Descriptors: Ethiopia, Addis Ababa
Cataloge Date: 02/27/2013
Broad Subject heading: Poverty
Call Number: 330.963 PRO 2010
Serial Key Title: Proceedings of the Seventh International Conference on the Ethiopian Economy
Publication catagory: International Conference
Content type: EEA Publication
Volume: I
Publication date: 2013-05-27 23:10:00
Forum or Discussion date: 2013-02-27 15:02:21
Place of publication: Addis Ababa, Ethiopia
Type of material: Book
Current frequency: Annualy
Author: Esubalew Alehegn & Mastewal Dessalew

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