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Foreign aid, growth, and poverty relation: a quantile regression approach

Author

Listed:
  • Eskander Alvi

    (Western Michigan University, USA)

  • Aberra Senbeta

    (Bloomsburg University of Pennsylvania, USA)

Abstract

In this paper, we examine the aid-growth-poverty relation by using quantile regression, which enables us to estimate the impact of growth and growth enhancing policies at different quantiles in the conditional distribution of poverty. The coefficient estimates in a quantile regression capture the marginal impact of a change in the explanatory variable observed at the quantile of the dependent variable. We find that growth in average income and other growth enhancing policies have heterogeneous impact on poverty, specifically that the marginal effect of growth and growth enhancing policies decreases at higher levels of poverty. These results are robust to the consideration of endogeneity of aid and use of alternative measures of povertyÑpoverty gap and squared poverty gap.

Suggested Citation

  • Eskander Alvi & Aberra Senbeta, 2014. "Foreign aid, growth, and poverty relation: a quantile regression approach," Journal of Developing Areas, Tennessee State University, College of Business, vol. 48(3), pages 381-403, July-Sept.
    • Handle: RePEc:jda:journl:vol.48:year:2014:issue3:pp:381-403
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    Citations

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    Cited by:

    1. M. Adnan Kabir, 2020. "Foreign Aid Effectiveness: Evidence from Panel Data Analysis," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 12(3), pages 283-302, September.
    2. Jun Zhang & Yuang He & Jing Zhang, 2022. "Energy Poverty and Depression in Rural China: Evidence from the Quantile Regression Approach," IJERPH, MDPI, vol. 19(2), pages 1-21, January.
    3. Lee, Chien-Chiang & Wang, Chih-Wei & Ho, Shan-Ju, 2022. "Financial aid and financial inclusion: Does risk uncertainty matter?," Pacific-Basin Finance Journal, Elsevier, vol. 71(C).
    4. Carlos García & Zaida Quiroz & Marcos Prates, 2023. "Bayesian spatial quantile modeling applied to the incidence of extreme poverty in Lima–Peru," Computational Statistics, Springer, vol. 38(2), pages 603-621, June.
    5. Edmore Mahembe & Nicholas Mbaya Odhiambo, 2021. "Does foreign aid reduce poverty? A dynamic panel data analysis for sub-Saharan African countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(4), pages 875-893, December.

    More about this item

    Keywords

    Foreign Aid; Growth; Poverty; Quantile Regression;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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