This paper analyses rural poverty in Ethiopia using the 1997 round of household survey data from the Ethiopian Rural Household Survey. Poverty measurements are estimated using a consumption based two-step procedure through the implementation of the Foster-Greer-Thorbecke model. The results indicate that the incidence of rural poverty is high for villages that have lower conditions for agriculture. These findings imply that poverty reduction can be possible through effective policies toward improving the conditions for agriculture in the rural areas. Moreover, examination of the connection between different socioeconomic characteristics and poverty indicates that households consisting of household heads with a higher age and availability of farmland are relatively less poor. However, households where the household head has completed at least primary school suffer from most incidence of poverty.
Furthermore, this study use three different definitions of poverty in connection to well-being to determine poverty. It is possible to state that these measurements are different modifications of each other with common variables and follow the same trend. The results of the paper may increase our understanding of the nature of rural poverty in Ethiopia and help in providing different poverty reducing policies, for the specific survey round.