Does the Empowerment Dimension Really Matter in the Measurement of Multidimensional Poverty? Insights from Smallholder Dairy Producers in the Central Highlands of Ethiopia

Abstract

This study examines multidimensional poverty among rural households in Basona Werana Woreda, North Shewa, Amhara Region, using survey data gathered from 262 rural households through a multi-stage sampling design. Employing alternative Multidimensional Poverty Index (MPI) frameworks, the analysis estimates poverty with and without an empowerment dimension under both nested and equal weightings to assess the sensitivity of poverty estimates to indicator composition, weights, and deprivation cutoffs. Household data were analyzed using descriptive methods and a fractional logit regression model to identify the drivers of multidimensional poverty. The results using the default 33% MPI cutoff revealed persistently high levels of deprivation, with poverty incidence ranging from 61.9% to 90.9% depending on the specification. Incorporating empowerment consistently increases measured poverty under nested weights and contributes substantially to overall MPI, highlighting deep structural deficits in agency and collective participation among rural households. Determinant analysis shows that membership in water user associations and input supply groups, access to electricity, larger household size, and lower dependency ratios significantly reduce multidimensional poverty, while female headship, older household heads, and greater distances to basic services exacerbate deprivation. Contrary to expectations, off-farm participation is associated with higher MPI when empowerment is included, suggesting that such activities serve mainly as coping strategies among land-constrained households. Overall, the findings underscore the methodological and policy importance of integrating empowerment into multidimensional poverty measurement and call for rural development strategies that strengthen institutions, infrastructure, and agency-enhancing interventions.