Finance and Poverty in Ethiopia: A Household Level Analysis

Alemayehu Geda (), Abebe Abebe and Daniel Zerfu Gurara

No RP2006-51, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: In this paper, using the rich household panel data of urban and rural Ethiopia that covers the period from 1994 to 2000, we attempted to establish the link between finance and poverty in Ethiopia. Our results show that access to finance is an important factor in consumption smoothing and hence poverty reduction. We also found evidence for a poverty trap due to liquidity constraints that limits the ability of the rural households from consumption smoothing. The empirical findings from this study could inform finance policies aimed at addressing issues of poverty reduction.

Keywords: Consumption; Finance; Households; Poverty (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (15)

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