| Economic development and social welfare can be evaluated through various indicators, including real GDP per capita and the Human Development Index (HDI). However, these aggregate measures fail to capture all facets of human welfare. To address the limitations of using GDP and its derivative as a measure of living standard, this study utilized alternative metrics to assess welfare at the household level using the latest three rounds (2015/16, 2018/19, and 2021/2022) of the Living Standards Measurement Study (LSMS). Absolute poverty and income inequality increased between 2015/16 and 2021/22, particularly in rural areas and in some regional states. Despite a reduction in food poverty, overall poverty rates worsened, with rural areas disproportionately affected. Income growth did not benefit the poor in several regions, pointing to a gap between policy design and poverty outcomes. The policy implications stress the need for targeted rural development, inclusive growth strategies, stronger redistributive policies, and continuous monitoring to ensure that pro-poor policies are effectively addressing poverty and inequality across Ethiopia. |
