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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 International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 126873.

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    Date of creation: 2012
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    Handle: RePEc:ags:iaae12:126873

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    Keywords: Poverty Dynamics; Vulnerability; Rural Ethiopia; Community/Rural/Urban Development; Food Security and Poverty; I32;

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    1. Stefan Dercon & Pramila Krishnan, 1998. "Changes in Poverty in Rural Ethiopia 1989-1995: Measurement, Robustness Tests and Decomposition," Center for Economic Studies - Discussion papers ces9819, Katholieke Universiteit Leuven, Centrum voor Economische Studiƫn.
    2. Arne Bigsten & Abebe Shimeles, 2011. "The persistence of urban poverty in Ethiopia: a tale of two measurements," Applied Economics Letters, Taylor & Francis Journals, vol. 18(9), pages 835-839.
    3. Neil McCulloch & Bob Baulch, 2000. "Simulating the Impact of Policy upon Chronic and Transitory Poverty in Rural Pakistan," Econometrics 0004003, EconWPA.
    4. Andrea Brandolini & Silvia Magri & Timothy M. Smeeding, 2010. "Asset-based measurement of poverty," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 267-284.
    5. Liverpool, Lenis Saweda O. & Winter-Nelson, Alex, 2010. "Asset versus consumption poverty and poverty dynamics in the presence of multiple equilibria in rural Ethiopia," IFPRI discussion papers 971, International Food Policy Research Institute (IFPRI).
    6. 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.
    7. James E. Foster, 2007. "A Class of Chronic Poverty Measures," Vanderbilt University Department of Economics Working Papers 0701, Vanderbilt University Department of Economics.
    8. Booysen, Frikkie & van der Berg, Servaas & Burger, Ronelle & Maltitz, Michael von & Rand, Gideon du, 2008. "Using an Asset Index to Assess Trends in Poverty in Seven Sub-Saharan African Countries," World Development, Elsevier, vol. 36(6), pages 1113-1130, June.
    9. Raghbendra JHA & Tu DANG & Krishna Lal SHARMA, 2009. "Vulnerability to poverty in Fiji," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 9(1).
    10. Islam, Nizamul & Shimeles, Abebe, 2007. "Poverty dynamics in Ethiopia: state dependence," Working Papers in Economics 260, University of Gothenburg, Department of Economics.
    11. Romina Cavatassi & Benjamin Davis & Leslie Lipper, 2004. "Estimating Poverty Over Time and Space: Construction of a time-variant poverty index for Costa Rica," Working Papers 04-21, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    12. 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.
    13. 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.
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