Nonmonetary poverty in Ethiopia: Multidimensional approach

Abstract This study aims to estimate the nonmonetary multidimensional poverty index (MPI) for Ethiopia using the counting approach of Alkire and Foster and the 2016 Ethiopia Demographic Health Survey (DHS) data. Fourteen country‐specific indicators are used for the poverty estimation using equal and unequal weighting approaches. It is found that, the estimation with unequal weighting gives a much higher level of MPI compared to the equal weighting approach. The results also show that cooking fuel, electricity, housing, and women's literacy are more relevant indicators of multidimensional poverty in Ethiopia. The contribution of place of delivery, domestic violence, and women's right to make decisions is also not minimal. It is also found that the MPI estimation depends on the specific weighting method used, number of dimensions and indicators selected for estimation, and cross‐dimensional cut‐off applied. Hence, policies that lessen poverty by improving cooking fuel, electricity, housing, and women's literacy, which are particularly focussed on rural areas, are needed. In addition, the application of unequal weighting, which enables us to see the trade‐off between dimensions, is better to determine the indicators in which society is more deprived than equal weighting.