Department of Economics

Permanent URI for this collectionhttps://repository.mu.edu.et/handle/123456789/118

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Cost-Effectiveness Analysis of Fertilizer Input on Sorghum Productivity in Tahtay Adyabo, northwester Tigrai
(Mekelle University, 2025-09-23) Surafeal Gerezghir
This study evaluates the cost-effectiveness of various fertilizer inputs on sorghum productivity in Sheraro, Northwestern Tigray. Sorghum (Sorghum bicolor) plays a vital role in Ethiopian agriculture, serving as a staple food and a key source of income for many households. Utilizing a mixed-methods approach, this research examines the impact of different types of fertilizers organic, inorganic, and blended on yield outcomes, economic viability, and soil health. Key findings indicate that nitrogen-based fertilizers are predominantly used among farmers, yet a significant interest in organic options is emerging. The economic analysis reveals that integrated nutrient management practices can enhance productivity while promoting sustainability. This study provides practical recommendations for farmers, aiming to improve their fertilizer use efficiency and inform agricultural policy decisions. By addressing the gaps in knowledge regarding fertilizer effectiveness and its economic implications, this research contributes to the ongoing efforts to enhance agricultural productivity and food security in Ethiopia.
Determinant of Urban Households’ Food Insecurity: The Case of Mekelle City
(Mekelle University, 2025-02-23) Getnet Ashagrie
This study seeks to analyze food insecurity issues by assessing socio-economic factors that impact the food insecurity of households in urban areas of Mekelle City. The analysis was based on survey data gathered from 397 urban households selected using a simple random sampling procedure. Primary and secondary data were used. The data regarding household determinants were analyzed using descriptive statistics and a binary logit model. The survey result showed that about 27.71% and 72.29% of sample respondents were food insecure and secure, respectively. The empirical results estimated using the survey data to identify the determinants of food insecurity among urban households in the study area revealed mixed impressions. Among the variables considered, age of the household head, income of the household, house ownership, and household food expenditure had a statistically significant effect on food insecurity in the study area. This study adds to the literature by contextualizing urban food insecurity within Sen's Entitlement Framework and the Sustainable Livelihoods Framework in post-conflict areas. Most importantly, the study has delivered findings that call for targeted interventions on income diversification, affordable housing, and gender-responsive policies. This is followed by practical recommendations for policymakers, underscoring the need for context-specific approaches to urban food insecurity in conflict-affected areas.
The Impact of Foreign Direct Investment on Poverty Reduction in Ethiopia: A Cointegrated VAR Approach
(Mekelle University, 2025-08-23) Shishay Tsehaye
This study investigates the impact of Foreign Direct Investment on poverty reduction in Ethiopia over the period 1990 to 2023, employing a Cointegrated Vector Autoregressive model. The primary objective is to examine both the long-run and short-run dynamics between Foreign Direct Investment inflows and poverty, proxied by real Gross Domestic Product per capita, while controlling for trade openness, government expenditure, inflation, infrastructure development, and education expenditure. The research uses annual secondary data sourced from the World Bank, the United Nations Conference on Trade and Development, the National Bank of Ethiopia, and the Ethiopian Investment Commission. Stationarity was tested using the Augmented Dickey-Fuller and Phillips-Perron methods, followed by optimal lag selection based on the Akaike Information Criterion, the Schwarz Bayesian Criterion, and the Hannan-Quinn Criterion. Johansen cointegration analysis confirmed the existence of two long-run equilibrium relationships among the variables, leading to the estimation of a Vector Error Correction Model. The empirical findings reveal a positive and statistically significant long-run effect of Foreign Direct Investment on real Gross Domestic Product per capita, indicating that sustained Foreign Direct Investment inflows contribute to improved living standards and poverty reduction. Infrastructure and education spending were also found to enhance the poverty-reducing effects of Foreign Direct Investment, while inflation exerted a negative impact. Short-run effects of Foreign Direct Investment on poverty reduction were positive but smaller in magnitude, with the error correction term indicating a thirty-seven percent annual adjustment toward long-run equilibrium. Granger causality tests confirmed unidirectional causality from Foreign Direct Investment to poverty reduction. Variance decomposition and impulse response functions further underscored the importance of Foreign Direct Investment in explaining changes in living standards over time. The study concludes that Foreign Direct Investment plays a significant role in poverty reduction in Ethiopia when supported by investments in infrastructure and human capital, alongside macroeconomic stability. Policy recommendations include strengthening the investment climate, targeting Foreign Direct Investment toward labor-intensive and pro-poor sectors, expanding infrastructure, improving education and vocational training, and ensuring macroeconomic stability. These findings provide both academic and policy relevance, offering evidence-based guidance for maximizing the developmental benefits of Foreign Direct Investment in Ethiopia.
THE IMPACTS OF URBAN AGRICULTURE ON POVERTY REDUCTION IN AKSUM TOWN, CENTRAL ZONE OF TIGRAY, NORTHERN ETHIOPIA
(Mekelle University, 2025-10-25) ATSBEHA GEBRESLASIE
This study examines the impacts of urban agriculture on poverty reduction in Aksum Town, located in the Central Zone of Tigray, Northern Ethiopia. As urban poverty continues to challenge local livelihoods, urban agriculture has emerged as a potential strategy for enhancing household income, food security, and employment. The study employed, methods, approaches, incorporating quantitative data from a sample of 300 households drawn from three kebeles. Descriptive statistics and Propensity Score Matching (PSM) were used to evaluate the socio-economic benefits associated with urban farming. The findings indicate that households engaged in urban agriculture experience significantly higher income levels, better food availability, and improved resilience compared to non-participating households. Key urban farming activities include vegetable cultivation, poultry rearing, fruit tree planting, and small-scale livestock production. These activities not only supplement household food consumption but also generate marketable surplus, creating additional income streams. Moreover, urban agriculture contributes to urban dwellers employment in the town. The study concludes that urban agriculture serves as a viable poverty reduction strategy in Aksum town by improving livelihoods, promoting food self-sufficiency, and strengthening social and economic stability. It recommends that local authorities and development partners integrate urban agriculture into urban planning and provide technical and financial support to enhance its effectiveness and sustainability.
The Role of Institutions in Economic Growth in Ethiopia: An Empirical Analysis Using the Autoregressive Distributed Lag (ARDL) Model
(Mekelle University, 2025-02-23) Giday Gebrekidan
The main goal of this research was to look at institution’s role in the performance of Ethiopian economy which is considered an underdeveloped economy. For this purpose the ARDL bounds testing approach to cointegration proposed by Pesaran et al. (2001) and updated with Kripfganz and Schneider (2020) critical values and approximate p-values was used. The short-run and long-run correlations between institutional and other macroeconomic and control variables over the period 1982-2022 were investigated. It made use of secondary data obtained from the World Bank’s World Development Indicators (WDI) for the macroeconomic and control variables and it used Freedom House’s Political Freedom Index for the institutional variable. In case of variables where the WDI has gaps other supplementary sources were used such as the YCharts, Federal Reserve Bank of St. Louis and the National Bank of Ethiopia. The empirical result obtained for the Ethiopian economy suggests the institutional variable takes the lion’s share in its impact on the economy and implies that once the institutional dynamics is introduced in the model the other macroeconomic variables loss their predictive powers.