Poverty and Income Distribution in Ethiopia: 1994 - 2000

Abstract

Poverty and income distribution in Ethiopia were analyzed for the period 1994-2000 based on a panel data-set. The period under study is characterised by fast changing circumstances, from peace, economic reform and recovery during 1992-1997, then deteriorating into all-out war with Eritrea, severe drought and political instability during 1998-2000. The paper examines the evolution of poverty and income distribution in this setting, with a focus on the decomposition of poverty and inequality into proximate determinants. The potential effects of policy changes on poverty were also simulated and the results are reported.