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Vulnerability, seasonality and poverty in Ethiopia

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  • Stefan Dercon
  • Pramila Krishnan

Abstract

Most studies examining the dynamics of welfare have found large fluctuations in consumption over relatively short periods, suggesting substantial short-run movements in and out of poverty. The consequence is that cross-section poverty research may not be able to identify the poor. In this study, we explore this short-run variability further. We use a data set on a panel of 1450 households in different communities in rural Ethiopia, surveyed thrice, over 18 months. On average year-to-year poverty is very similar. However, we find high variability in consumption and poverty, over the seasons and year-by-year. Econometric analysis suggests that consumption is affected by idiosyncratic and common shocks, including rainfall and household-specific crop failure, while households respond to seasonal incentives related to changing labour demand and prices. The results imply that a larger number of households are vulnerable to shocks than implied by the standard poverty statistics, while some of the non-poor in these statistics are in fact otherwise poor households temporally boosting their consumption as an optimal response to changing seasonal incentives.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Development Studies.

Volume (Year): 36 (2000)
Issue (Month): 6 ()
Pages: 25-53

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Handle: RePEc:taf:jdevst:v:36:y:2000:i:6:p:25-53

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