Statistical Analysis on the Determinants of Income Inequality in Ethiopia

Abstract

Income inequality is mainly concerned with the relative position of different individuals within the income distribution. The objective of this study was to identify the determinant factors of income inequality in Ethiopia. In this study the data source was the Ethiopian Demographic and Health Survey conducted in 2016 (EDHS 2016) from central statistical agency. In the data analysis method we applied ordinal logistic regression model. From chi-square test of association age, sex of house hold head, number of children, number of hectares of agriculture, Main floor material, has electricity, sources of drinking water, own live stock for farm, place of residence, types of toilet facility, locations of source for water, numbers of own cattle, Locations of toilet facility, Time to get water source (minute) had a significant association with house hold income. In this study the result of ordinal logistic regression model indicates that the selected variables place of residence, main floor material, sex of house hold , has electricity , own live stock for farm , age, source of drinking water ,numbers of children , were found to have significance effect on house holed income level. The government should be the services of electricity broadly distributed to rural, encouraging the female participation , the expansion of urbanization for the areas of rural as much as possible, formulates suitable policy in family planning for reducing the number of children in order to decrease income inequality.