The effect of residential house rent on Urban households poverty status in Ethiopia: evidence from Wolkite town

Abstract

The study investigated the effect of residential house rent on urban household poverty status in Ethiopia with evidence from Wolkite town. By using structured questionnaires, primary data was collected from 248 household heads living in rental housing. In addition, a key-informant interview was conducted with the town municipality offices for triangulation purposes. The collected data were analysed by using descriptive and inferential statistic. The inferential statistic was estimated by using logistic regression model. The statistical package used to estimate the model was STATA version 14. The empirical result shows that rising residential house rent increases the poverty status of urban households. The poverty status of households is also negatively associated with access to housing allowance. Policy makers should note that the source and scope of poverty is varied. Poverty reduction policy should account the rental price of housing and integrate it with the broader national policies. Thus, the issue of residential house rent and housing should be part and parcel of the poverty reduction strategy of the government. Housing policies should also be integrated with other objectives of the government. A timely revised housing allowance and housing opportunities should be accessible to the low-income households.

Keywords:

• Residential house rent
• Urban poverty
• house allowance
• Wolkite town

PUBLIC INTEREST STATEMENT

Rental housing is a vital accommodation mechanism for households. Thus, residential housing rent is the major expenditure item in low-income households’ budget. The rental price of housing units has experienced an increasing trend which left low-income households with little money to please other basic needs such as food, cloth, transportation, and health care outlay. Wealth of studies is conducted about the determinants of urban poverty but the association between poverty and housing rent has not been explored. Therefore, the objective of this study is to examine the effect of residential house rent on urban household poverty status in Ethiopia with evidence from Wolkite town. The result shows rising residential house rent increases the poverty status of urban households. Policy makers should integrate the rental price of housing with the broader national policies, and it should be part and parcel of poverty reduction strategy.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Following the Ethiopia Age Structure (2020), in this study considering the respondents age, it is categorized into three components. These are the early working age (15–24) years, the prime working age (25–54) years, and the mature working age (55–64) years.

Additional information

Funding

The author received no direct funding for this research.

Notes on contributors

Endalkachew Kabtamu Mekonen

Endalkachew Kabtamu Mekonen is lecturer and researcher at the department of Economics, and Research, community Service and Postgraduate student coordinator of Business and Economics College, Wolkite University, Ethiopia. He holds BA degree in Economics from Addis Ababa University, school of Economics. He has also pursued his postgraduate study at the same University at the School of Economics with concentration under Economics Policy Analysis. He has published over 10 articles on international journals. His research interests include poverty, agricultural economics, urban economics, financial economics, human resource economics, macroeconomic and microeconomic issues.