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This studies focusing on investigating the source of inequality in urban part of Ethiopia. The study are more of descriptive and econometric analysis was employed as general method of analysis by using the raw data collected from central Stastical authority based on the regression decomposition methodology of fields. The empirical result tells that the variables like age, sex, household size, gender and marital status have negative relation with expenditure/income and this variable is the highest contributor for variation in income/expenditure among the urban society in Ethiopia while the remaining variables like age square, value, numbers of household head with primary education, numbers of household head with secondary education, and numbers of household head with tertiary education are positively related with expenditure/income or positively affect expenditure in the household head and this variable is highest contributor for reducing the deviation among the urban society interms of income/expenditure. The employment, the occupation and the race are also having a great contribution for the inequality of income in urban part of our country. The government should employ poor oriented policy in order to curb income inequality especially the government should invest urban infrastructural development (road, private and condominium housing construction) which have a great contribution to reduce inequality among the household head in urban Ethiopia.

Factors Influencing Income Inequality in Urban Ethiopia (Cross-sectional Analysis)