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Poverty Dynamics and Vulnerability: Empirical Evidence from Smallholders in Northern Highlands of Ethiopia

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  • Tsehay, Abrham Seyoum
  • Bauer, Siegfried
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    Abstract

    This study is primarily intended to examine the dynamics and determinants of rural household poverty and vulnerability in Northern Highlands of Ethiopia. The data for this research is mainly based on the Ethiopian Household Survey (ERHS). Results from disaggregation of the poor indicate that ultra poverty is predominant in the area. Similarly, using a three steps feasible generalized least squares (FGLS) we found that many of the households in the region are vulnerable to poverty. However, the trend has been found to vary across villages for both poverty and vulnerability measures. Besides, poverty decomposition of sample households showed that chronic poverty is dominant while transient poverty is secondary. An implication of this is that programs targeting on poverty should primarily focus on factors causing persistence deprivation without undermining risk factors that drag households in to poverty. Finally, some of the important determining factors of observed poverty appear to impact on vulnerability to poverty differently. Therefore, strategies aimed at reducing poverty should critically consider factors that make households vulnerable to poverty.

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    Bibliographic Info

    Paper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 126780.

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    Date of creation: 2012
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    Handle: RePEc:ags:aaea12:126780

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    Keywords: Poverty Dynamics; Vulnerability; Rural Ethiopia; Consumer/Household Economics; Food Security and Poverty; I32;

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    1. Glewwe, Paul & Hall, Gillette, 1998. "Are some groups more vulnerable to macroeconomic shocks than others? Hypothesis tests based on panel data from Peru," Journal of Development Economics, Elsevier, vol. 56(1), pages 181-206, June.
    2. Ahmed, Akhter & Hill, Ruth Vargas & Wiesmann, Doris, 2007. "The poorest and hungry: Looking below the line," 2020 vision briefs BB03 Special Edition, International Food Policy Research Institute (IFPRI).
    3. Bigsten, Arne & Shimeles, Abebe, 2008. "The persistence of urban poverty in Ethiopia: A tale of two measurements," Working Papers in Economics 283, University of Gothenburg, Department of Economics.
    4. James E. Foster, 2007. "A Class of Chronic Poverty Measures," Vanderbilt University Department of Economics Working Papers 0701, Vanderbilt University Department of Economics.
    5. Raghbendra Jha & Tu Dang & K L Sharma, 2008. "Vulnerability to Poverty in Fiji," Departmental Working Papers 2008-07, The Australian National University, Arndt-Corden Department of Economics.
    6. Shubham Chaudhuri & Jyotsna Jalan & Asep Suryahadi, 2002. "Assessing household vulnerability to poverty from cross-sectional data: A methodology and estimates from Indonesia," Discussion Papers 0102-52, Columbia University, Department of Economics.
    7. Neil McCulloch & Bob Baulch, 2000. "Simulating the Impact of Policy upon Chronic and Transitory Poverty in Rural Pakistan," Econometrics 0004003, EconWPA.
    8. Islam, Nizamul & Shimeles, Abebe, 2007. "Poverty dynamics in Ethiopia: state dependence," Working Papers in Economics 260, University of Gothenburg, Department of Economics.
    9. Joan R. Rodgers & John L. Rodgers, 1993. "Chronic Poverty in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 25-54.
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