DEBREMARKOS UNIVERSITY

BURIE CAMPUS

DEPARTMENT OF ECONOMICS

ARESEARECH PROPOSAL ON EFFECTS OF HOUSEHOLD SIZE ON HOUSEHOLD

INCOME DISTRIBUTION, BURIE TOWN, Ethiopia

NAME ID NO

ERMIASALEFE........................................806/11

MELKAMU TIRUNEH...............................814/11

NEBERU GATINET.......... ..........................818/11

ADIVAYISOR MENGlSTU Y(msc)

march, 2021

BURIE ETHIOPIA
Acronyms
CSA: Central statistical agency

DCS: Developed countries

FAO: food and agricultural organization

GDP: Gross domestic product

HH: Households

KM: Kilometers

LDCS: Least development countries

MM: Millimeter

NLFS: National labor force survey

NOP: National office and population

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Contents
Acronyms.....................................................................................................................................................2
CHAPTER ONE..............................................................................................................................................4
1 INTRODUCTION....................................................................................................................................4
1.1 Back ground of the study.......................................................................................................................4
1.2. Statement of the problem......................................................................................................................4
1.3 objective of the study............................................................................................................................6
1.3.1General objective of the study.....................................................................................................6
1.3.2 Specific objectivesof the study...................................................................................................6
1.4. Significance of the study......................................................................................................................6
1.5 Scope of the study.................................................................................................................................6
1.6 Limitation of the study..........................................................................................................................6
1.7 organizationof thepaper………………………………………………………………………………………………………………………

CHAPTE TWO……………………………………………………………………………………………………………………………………………

REVIEW OF RELATED LITERATURE...............................................................................................................7

2.1Theoretical literature review...................................................................................................................7
2.1.1 Definition of household and household income..........................................................................7
2. 1.2 Sources of household income....................................................................................................8
2.1.3 Population and Development.....................................................................................................8
2.1.4 Household income distribution.................................................................................................10
2.1.5 Other cause of income inequality..............................................................................................10
2.1.6 Indicators of inequality.............................................................................................................11
2.1.7 Impact of income inequality.....................................................................................................12
2.2 Empirical literature reviews.................................................................................................................13
3 CHAPTERTHREE......................................................................................................................................13
METHODOLOGY OF THE STUDY.................................................................................................................13
3.1Description of study area......................................................................................................................13
3.2 Types and source of data...................................................................................................................13
3.3 Method of data collection...................................................................................................................13
3.4 Research Design..................................................................................................................................14
3.5 The sampling techniques and sample size...........................................................................................14
3.6Methode of data analysis.....................................................................................................................15

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3,7.Schedule and Budget...........................................................................................................................15
Time Schedule...........................................................................................................................................15
3.8 Budget schedule...................................................................................................................................15
RFERANCE..............................................................................................................................................16

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 CHAPTER ONE

1 INTRODUCTION
1.1 Back ground of the study
Population growth is the most important set of events to occur in human history. It has changed
and continues to the alter the way of life even in the most remote corners of the earth . The
number of world’s population increased, every day that is never previously existed or occurred in
history and unparalleled in its consequences. When rapid economic growth and technological
advances accompany it, the problems can be minimized. The rate of growth of population is a
ranged between countries in the world. LDCs are characterized by high rate of population growth
(Todaro, 2003). The world’s population of just 6billion people in 2000 more than of five-sixths
lives in LDCs and less than one-sixth live in DCs (Todaro, 2003 E.C).
The population of Ethiopia is also vulnerable to what faces other developing countries. The
social infrastructure and agricultural lands are unable to support the growth of population. As a
result, the societies remain strapped in the vicious circle of poverty, disease and hunger. One of
the strategies in to achieve food security and sustainable development, and building raise form of
development. From the study of human development features, the country has high rate of
population growth about 2.7% fertility rate (NOP, 2004).
In Ethiopia, some family planning activities have been started but need a lot of work in attain the
desired goals such as education, food security, balanced income, and standardized level of life.
The main reasons which severe household’s family planning at regional levels should be
identified, some policy implication and appropriate decision to overcome the rapid growth of
population should also be considered, and other related problems in the study was considered.

The distribution of house hold’s income is not even in every corner of the world.
However , the degree of inequality differs across countries. It aggravated or became most
wide from time to time . In general countries with high income gap have under gone
extend civil strife and set back development progress. This inequality of income also exists
across households with incountry. how family size determine household income distribution
(Todaro, 2003 E.C).

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1.2. Statement of the problem
Ethiopia is one of the developing nations the world which is rapidly economic growth. Major
factors with have held back the pace of development in many countries as well as Ethiopia stand
out with particular starkness. One of these is the low status and role of women which held
women back from full participation development (Abebe B, 1990).

Developing countries are characterized by low income level and highly skewed distribution of
income. No country of the world is free from uneven distribution of income. However, the
natural and degree of its distribution differs. This means that greater in equality is existing in
LDCs than DCs.

At a national level, the magnitude and extent of poverty in any country depend on two factors.
These factors are the average level of national income and the degree of in equality in its
distribution (Todaro, 2003 E.C). These two factors determine the magnitude and extent of hard
ship in any nation of the world. The distribution of total personal income among all nations is
extremely unequal in many countries, government redistributes top low income group and the
level through transfer payments financed by taxes (Todaro, 2003 E.C).

In fact, aggregate growth is probably the factors affecting the individual level of income. It also
ensured that better living standard of an individual or household differ based on the size. This, in
another way, paves the way for income inequality across households.

The fast growth rate of population has been facing by different socio-economic problem. Among
such problems effect of household’s size on their income distribution is one. Thus my study
would design to asses’ whether those and other effect of household size on household income
distribution in case of buire and how the problem could be handle to upgrade its activity in the
town. So, this study will answer questions regarding effects of household size on households’
income distribution.

 What are the roles of household’s member in each household?

 What effect does household size have on household income distribution?

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1.3 objective of the study
1.3.1General objectiveof the study
The general objective of the study to assess the effects of household siz on households’ income
distribution in case of burie town.

1.3.2 Specific objectivesof the study

The specific objectives of the study are

 To analyze the effects household size on income distribution.

 To analyze the role of house hold members in each house hold

1.4. Significance of the study

This study will be provide some important information about the effect of household size on
house hold income. The study will review the main Course and problem of household size on
household income in countr

1.5 Scope of the study

The study focused on setting the appropriate information regarding house hold size on income
distribution. That is, the study asses the income and its distribution at a household level. It also
limited to analysis the effects of household size on their income distribution in buire town.. The
study will be use primary data.

1.6 Limitation of the study

This study has different limitation. Among those, time constraint will be one. The next one is
financial constraints that arise from in sufficient money to undertake the study on time and
expenditure accompanied with data collection.

In spite of the above constraints much effort and work will be make to minimize those
constraints to undertake the study in an appropriated

1.7 Organization of the paper

The paper will be organize in five (5) chapters. The first chapter is introduction which
Contains background, statement of the problem of study, significance of the study, scope of the study,
limitation of the study, and organization of paper. The second chapter deals with reviews of related
literature.

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The third chapter deals with methodology and data source as well as description of the study
area. The fourth chapter deals with data analysis and findings while the fifth chapter deals with
conclusion of thestudy, and recommendation

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CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1Theoretical literature review
2.1.1 Definition of household and household income
Many different authors and economists defined household as all people who occupy a housing
unit. According to us census bureau, it is defined as a house, an apartment or other group of
rooms, or a single room, is regarding a housing unit when it is occupied or intended for
occupancy as a separate living quarters, that is when the occupants don’t live with any persons in
the structure and there is direct access from outside or through a common hall. It includes related
family members, and all the unrelated people, if any, such as lodgers, foster children, wards, or
employees who share the housing unit. A person living all one in housing unit, or a group of
unrelated people sharing a housing unit such as partners or roomers are also counted a
household.

Household income is measure of combined incomes of all people sharing housing unit or place
of residence. It includes every form of incomes, for example, salaries and wages, retirement
income, near cash government transfers like food stamps and investment gains. Average
household income need not map directly to measure of individual earnings such as per capital
income as numbers of peoples sharing households as numbers of income earners per household
can vary significantly between regions and over time.

One the other hand household income can be defined all the sum of money income and income
in kind and consists of receipts which as a rule, are of recurring nature and accrue to the
household or individual numbers of the household regularly at annual or at more frequent
intervals.

Household size is a number of persons usually living in the household including boarders of
servants.

In other way, it is essentially the number of persons living together of for whom you are
financially responsible.

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2. 1.2 Sources of household income
Economists divide income in to earned income and unearned income based on its source. Earned
income consists of chiefly, wages and salaries which are received in turn for labor. Wage
generally

paid according to numbers of hours worked for amount of labor while salaries are payments that
remains fixed for certain period such as month. Earned income also consists of income from self-
employments, business profits and income from personal investments such as rent and interests.

2.1.3 Population and Development

Population is a complex issue in addressing and requiring the knowledge of many factors influencing it.
Moreover, relating population issue to poverty and development requires a good understanding of
their interrelations. These complicated interrelations could be better to understand when looked at
on the following frame works.

2.1.3.1 Population and education

Social service provision is the fore front of the policy debate as far as the relationship between
population growth and economic development is concerned. Education is essential for satisfying
and rewarding life (Todaro, 2003). At the same time, it plays the key role in the ability of
developing countries to absorb modern technology and to develop the capacity for sustaining
growth and develop the education invested in today’s children believed to determine the human
capital skill of tomorrow’s labor force there by productivity (NOP, 2004).

The long-run effect of education is that better educated parents themselves likely to have fewer
children regarding to enhanced prospect for good health and survivals as result of awareness
about and use of family planning. On the country, the higher the fertility and birth rates which
are the courses for high population growth rate at national level. The lower the capacity of family
to spend on children’s education, such as family will be forced to go illiterate or will not get for
with their education (NOP, 2004).

2.1.3.2 Population and health

Similar to the above frame work, health care activities are highly effected by population
pressure, high fertility rate together with rapidly growing population also affect the household
health status and the ability of household to access health as well (NOP, 2004). In addition, rapid

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population growth has on impact on the ability to provide health by reducing precipitation
government spending on health service.

In countries like Ethiopia they cannot often pay medical treatment and it is government in almost
all developing counties to provide free services (Nigatu, 2004; FAO 1994).High fertility and lack
of child care spacing compromise the health of mother and reduce maternal child care. This in
turn results in high morbidity rate of mother and children. Achieving the largest set in health
service provision enable took lower mortality rate of all infants.

Mother when try took raise large family will still became fired and weak and may die leaving
children and husbands to struggle alone (Abebe; 1990).

It eventually, diverts attention from engaging in productive activities resulting in reducing

productivity.

Moreover, health is prerequisite for increases in productivity, while adequate health determines
successful education (Todaro, 2003). Their deal role as both inputs gives

2.1.3.3 Population and employment

Looking at the issue from the employment perspective, it can easily be noted that rapid
population growth includes high dependency ratio lowering the number of economically active
population estimated 2.2 million people were unemployed in Ethiopia (NLFS, 1999). This puts
urban unemployment rate at 25.7%. As the capacity of the economy cannot absorb the increasing
number of people joining the productive age group; with the rapid increasing easing population,
it is likely that unemployment will remain an increasing problem (NOP, 2004).

2.1.3.4 Household and food security

Household food security is understood as accesses to adequate food in quantity and quality, to
fulfill all nutritional requirements for all members of the households throughout the year (forum
for social studies, 2003). However, at the household level there is often a short fall in the level of
production which should not compromise household food security because acceptable food is
available with its reasonable distance to household and there is adequate income to purchase it.

2.1.4 Household income distribution

The distribution of income among the nations of the world is extremely unequal. This uneven
distribution of income is not only at a household level but also varies among individuals in the

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household. Personal income inequality between individuals in the household may fail to explain
the level of inequality at the household level.There are large disparities between income of the
rich and poor in both developing and developed countries (Todaro, 2003). Nevertheless, the gap

between rich and poor is generally greater in developing countries than developed countries. This
indicates that as the degree of hardship vary with in household. So, this variation between
households is not limited to household size but also other factors are there to contribute for this
difference.

2.1.5 Other cause of income inequality

A) System in heritance

The accumulation of rich person passes to their heirs by the system of in heritance. The heirs are
able to enjoy income or property without doing any work. Thus, in heritance has largely been
responsible for the emergence of leisure class whose members live in idleness and luxury
without contributing productive services to the nation.

B) Differences in ability

People have different natural qualities and talents. Some are more gifted than other persons who
are endowed by nature with special qualities, better physical building and greater capacity for
hard working than the other. This is also one of the reasons of income inequality.

C) Educational difference

At it is known, occupation through education is one major source of income. This means
individual with higher education qualification earn more than with lower or no qualification
(Pearson; Addison, 2006).

D) Difference in economic opportunities

Different individuals perform different types of jobs, they get salaries and wages. Generally
wages of labor class may be less than the salaries of skilled labor. The environment is important
factor in which people are born. They offered unequal advantage by environment in which they
are placed those born in well to do get favorable short in life through good education, better
training and social contact while those who born in poorer families may not have this advantage
(Todaro, 2003).

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E) Poverty

One of the basic causes for unequal distribution of income is poverty which is expressed in low
consumption levels, low per capital income and low standard of living (Jhingan, 2007).

F) Inequitable distribution of means of production

Inequality of income results from inequitable distribution of means of production (Jhihgan,

2007).

One of the means of production is capital people being poor, capital is scarce in LDCs. But it is
concentrated in the hands of rich who use in to their advantage.

G) Low productivity

Low productivity per unit of labor is also another factor for uneven distribution of income low
productivity keeps the income level of the people low. A worker with low productivity cannot
earn more and thus remain poor. And the gap between rich and continues to wide because the
rich have been able to increase their incomes continuously) Exploitation

Unorganized, illiterate and poor workers are generally exploited by the capitalist order and
business men usually earn large profit at the cost of the poor who are not paid a living wage.
Consequently, inequalities tend to be perpetuated (Campbell, S/L Brue, 1995).

I) Unemployment and underemployment

One of the prominent reason for unequal distribution of income is wide spread unemployment
and underemployment. Inequitable distribution of factors (means) of production is one factor that
leads to increasing unemployment and underemployment. As a result, the poor are becoming
poorer (Jhingan, 2007).

2.1.6 Indicators of inequality

There are many possible measures of equality (inequality) in the size distribution of income. The
most simple is taking a percentage of total income class (example, the bottom in 20% of course
the higher the share of high income class and lower the share of low income class, and the
greater the inequality. Another measure may be ration at the group. Both measures are easy to,
understand and calculate. However, they are subject to short coming such as partial use of

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information pertaining only to the top and the bottom groups and arbitrariness in demarcation of
income classes.

2.1.7 Impact of income inequality

How bad is inequality.No civilized people can feel satisfied with a state of affairs in which their
follow human exist in condition of absolute human misery, which is probably why every major
religion has emphasized the importance of working to alleviate poverty and is at least one of the
reasons why international development assistance has the universal assistance for every
democratic nation. But it may reasonably be asked, if our top priority is the alleviation of
absolute poverty, why should relative inequality be a concern?. The reasons to be concerned with
inequalities of among those above the poverty line are: First, extreme income inequality leads to
economic in efficiency.

This party because any given average income, for a loan or other source of accredit. Moreover,
with high inequality, because the highest rate marginal saving in found among the middle classes
(Todaro, 2003). Further, in equality may lead to an efficient allocation resource.

High inequality leads to an over emphasis on higher education at the exposes of equality
universal primary education and this in turn begets still more inequality income.

Those above the poverty line are that extreme income disparities undermined social stability and
solidarity. Worse, high inequality strong tens the political power of the rich, as well as their
economic bargaining power. Usually, this power will be used to in encourage outcomes
favorable to themselves (Todaro, 2003).

The third and final reason is that inequality is generally as unfair. The eminent phosphor john
Rawls proposed a thought experiment to help clarity is this so that is you might be born as still
creates, with equal probability.

2.2 Empirical literature reviews

Empirical studies of effects of household’s size on income distributions shows that household
size negatively effects household income. This means that increase in family members lead to
reduction of income and brought the people to the brink of the poverty line.

It also show that its distribution across the households maybe varied due to size of households. It
has been concluded that increase in household size lead to reduction of households income which

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in turn leads to income inequality between small and large household size mill anodic (2002)
derives measure of distribution for 1988 and 1993 on household survey data for 91 countries,

covering 84% of the world GDP. Mill concluded that the nature of distribution of income,
therefore, is central to any analysis of poverty problems in low income countriesDollar and royal
(200) examines the relationship between growth and income distribution across 80 countries over

40 years. They find the income of the poor (bottom 20% of the population) raise one to one with
overall growth with and the relation is no difference in poor countries than rich one.

3 CHAPTERTHREE

METHODOLOGY OF THE STUDY

3.1Description of study area
This study mainly focuses on Burie Town, West GojjamZonein Amhara regional state of
Ethiopia. This town has alongitude and latitude of 10042’N 3704’E/10.7000N 37.0670E with an
elevation of 2091 meters above sea level.. Demographics based on figures from the central
statisticla agency in 2013, this town has an estimated total population of 104047 of whom 49786
are men and 54261 arew omen.

3.2 Types and source of data

The researcher used only primary source of data .Primary source of data will be collecte from
households and administrative of town through distribute questionnaires.

3.3 Method of data collection

The data collected from only primary data. Primary data will collectefrom preparing
questionnaires and distributingit’s to selected respondent from the study areas.

3.4 Research Design

Research use survey type of the research which will more of descriptive of phenomena and
identify information on problem. Therefore both qualitative and quantitative form of data will
collecte

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3.5 The sampling techniques and sample size
Since burie town have 8 kebele.based on this information will be selecting two kebele based on
applying method of stratified sampling techniques because their areas was different condition.
The study used stratified sampling techniques because the method is more representative of the
true population and easily improved. The researcher used 60 sample size from randomly two
kebeles01 and wanigedam.The total population of two kebeles were 20111 from the first
kebele10767 and second 9346 respectively.

Strata formula

n =sample size

Ni= Total population of each Kebele

N= Total population of the Kebele

n = n (Ni)/N

01Kebele

10767/20111*60 = 32

wanigedamkebele

9346/20111*60 = 28

Total sample size or n =n1+n2

N=32+28 = 60

3.6Methode of data analysis

The method used to present the data in this study is descriptive method. The collected data from
source of organized and classified according to their relation using table and percentage to
describe the effect of household size on household income.

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 3,7.Schedule and Budget
Time Schedule
Table3:7Time schedule
N o Description or Activity D u r a t i o n Final Date Remark
1 Tittle selection N o v e m b e r
2 Collection of information

N o v e m b e r
3 Data collection and organization

D e c e m b e r
4 Data analysis M a r c h
5 Report generation A p r i l
6 Submission date M a y
7 P r e s e n t a t i o n J u n e

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3.8 Budget schedule
Table3.2:Budget schedule of thestudy

Item or Activity

U n i t Unit price Computation Total cos t Remark

P a p e r 1/8dorson 250birr per dorson

31birr with 25cents

31birr with 25cents

P e n 4 1 0 b i r r 4 0 b i r r 4 0 b i r r
Mobile Card 5 0 b i r r
P r i n t - - - -
Trans portation cost

- - - -
Miscellaneous expense

- - - 2 0 b i r r

T o t a l

71birrwith25cents 140birrwith25cents

RFERANCE
Abebe B ,2002 Women development agents, AddisAbaba.

CSA, 2007 population issues.

Campbell, S,L Brue, 1995; Contemporary laboreconomics.

FAO committee on world food security, Assessment of the current world food situation and
recent policy development, March 1995.

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Forum for social study ,2003; Papers presented at the first international conference on the
Ethiopian economy bJanuary 3-05,2003.

Funchs,V.R,1983:Howwelive,aneconomic perspective on Americans from birth to

death,Cambridge:Harvard University Press.

Getahun.Hand Esthete, 2003: macro level operational barrierst of family planning services in
Ethiopian.

Hirutterefe,1979:The role of Ethiopian women innational building department of sociology,

AAU, Seminar paper.

Jhingan.M.L,2007:Economics of development and planning.

National office and population/NOP,2004/:population and development, Addis Ababa, Ethiopia.

National Labor force survey(NLFS), 1999:labor force survey ,central statistical authority
,Ethiopia.

Person, Addison ,2006:International economics

Ray Debray,2002,Development economics ,BeijingUniversitypress,chinesedition2002.

SelamAveleTesema, 2006:population,food security and environment.

Todaro,2003:Economicdevelopment,Newyork University,11edition.

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