Household level vulnerability analyses are becoming main issue in economics literature. Yet very few empirical works have been done to examine the extent of Eastern Ethiopia urban (Dira Dawa, Harar and Jigjiga towns) households’ vulnerability to multidimensional poverty. This paper tried to fill the gap by using a survey that was conducted to collect information on household’s characteristics, socioeconomic status, shocks experience and responses to shocks during the year 2016. Unlike conventional studies of household vulnerability, this study calculates household’s probability of experiencing a broad and non-monetary characterization of poverty: the multidimensional poverty index using Structural Equation and Tobit model. The Structural Equation Model result revealed that, the health and education dimensions of multidimensional poverty significantly contributed a lot to households’ vulnerability to multidimensional poverty. Based on the Tobit model result households’ vulnerability to multidimensional poverty would be reduced if the household is wealthier, better educated healthier, employed and has the practice of reducing the size of meals at the time of shock. Contrary to this, if the household has large family size, prone to health problem, and has not developed the culture of reducing the number of meals per day, there is high risk of vulnerability to multidimensional poverty. Hence, the study recommended that there is a dire need for policies and programs that can improve wealth and education statuses of household members, create employment opportunity, promote family planning, improved health situation and accessibility of food for the vulnerable households.

Household level vulnerability analyses are becoming main issue in economics literature. Yet very few empirical works have been done to examine the extent of Eastern Ethiopia urban (Dira Dawa, Harar and Jigjiga towns) households’ vulnerability to multidimensional poverty. This paper tried to fill the gap by using a survey that was conducted to collect information on household’s characteristics, socioeconomic status, shocks experience and responses to shocks during the year 2016. Unlike conventional studies of household vulnerability, this study calculates household’s probability of experiencing a broad and non-monetary characterization of poverty: the multidimensional poverty index using Structural Equation and Tobit model. The Structural Equation Model result revealed that, the health and education dimensions of multidimensional poverty significantly contributed a lot to households’ vulnerability to multidimensional poverty. Based on the Tobit model result households’ vulnerability to multidimensional poverty would be reduced if the household is wealthier, better educated healthier, employed and has the practice of reducing the size of meals at the time of shock. Contrary to this, if the household has large family size, prone to health problem, and has not developed the culture of reducing the number of meals per day, there is high risk of vulnerability to multidimensional poverty. Hence, the study recommended that there is a dire need for policies and programs that can improve wealth and education statuses of household members, create employment opportunity, promote family planning, improved health situation and accessibility of food for the vulnerable households.