Pathways Towards Prosperity in Rural Nicaragua: Why households drop in and out of poverty, and some policy suggestions on how to keep them out
AbstractWhile Nicaragua over the past decade has ranked among the poorest countries in Latin America in terms of per capita GDP, data from the last three LSMS surveys (1993, 1998, and 2001) has shown a consistent, though modest, decline in the incidence of poverty. Nationally, the incidence of poverty among individuals has fallen from 50.3 to 45.8 percent over this period. Most poverty is concentrated in the rural sector (with an incidence of 67.8 percent) and in particular in the Central region (75 percent) (World Bank, 2002a). Given the dynamism of agriculture over the last decade, it is somewhat surprising that the reduction of rural poverty has not been greater. Further, this apparent slow, but stable decline in overall poverty incidence masks active movement at the household level in and out of poverty, particularly in the rural sector. At the household level it is much more difficult to find and explain an overall march towards increased living standards. In this paper we analyze the dynamic of poor households moving in and out of poverty, using panel data from the 1998 and 2001 LSMS surveys. The availability of panel data offers an opportunity to analyze who and how households escaped or fell into poverty. What were the principal exit strategies used by households? What are the major determinants of exiting poverty and remaining in poverty? How do poor rural households achieve prosperity? While we touch on both the rural and urban poor, we concentrate primarily on rural households, given their much larger numbers and greater heterogeneity. We apply a variety of methodologies in our analysis of poverty exit strategies. In Section II we provide some background information on the rural sector in Nicaragua, and in Section III we analyze changes in asset ownership and use as well as poverty status. We analyze who has left and entered poverty and provide a description of their characteristics. Given insufficient data points to separate chronic and transient poverty by econometric means, we will instead characterize these different groups of households in descriptive terms. In Section III we briefly describe the situation of agriculture, agricultural assets, and agrarian institutions, the basis of the rural economy in Nicaragua. Next, in Section IV we use econometric methods to find the determinants of changes in welfare over the panel period as measured by consumption and income. In the conclusions in Section V, we will bring these three types of analysis together and build a matrix of poverty exit paths combined with policy recommendations for specific categories of rural households. Full results can be found in Appendices II, while a detailed discussion of panel data issues, most importantly that of attrition, can be found in Appendix I.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA) in its series Working Papers with number 02-12.
Length: 57 pages
Date of creation: 2002
Date of revision:
Contact details of provider:
Postal: Agricultural Sector in Economic Development Service FAO Viale delle Terme di Caracalla 00153 Rome Italy
Phone: +39(6) 57051
Fax: +39 06 57055522
Web page: http://www.fao.org/es/esa/
More information through EDIRC
Agricultural economics; Agricultural sector; Agricultural structure; Data analysis; Data collection; Household food security; Households; Nicaragua; Poverty; Rural areas; Surveys; Urban rural migration;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- J. Edward Taylor & Antonio Yunez-Naude, 2000. "The Returns from Schooling in a Diversified Rural Economy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 287-297.
- David Lawson & Andy Mckay & John Okidi, 2006.
"Poverty persistence and transitions in Uganda: A combined qualitative and quantitative analysis,"
Journal of Development Studies,
Taylor & Francis Journals, vol. 42(7), pages 1225-1251.
- David Lawson, 2005. "Poverty Persistence and Transitions in Uganda: A Combined Qualitative and Quantitative Analysis," Economics Series Working Papers GPRG-WPS-004, University of Oxford, Department of Economics.
- Lawson, David & McKay, Andrew & Okidi, John A., 2004. "Poverty Persistence and Transitions in Uganda: A Combined Qualitative and Quantitative Analysis," Development Economics and Public Policy Working Papers 30555, University of Manchester, Institute for Development Policy and Management (IDPM).
- World Bank, 2004. "Drivers of Sustainable Rural Growth and Poverty Reduction in Central America : Nicaragua Case Study, Volume 1. Executive Summary and Main Text," World Bank Other Operational Studies 14554, The World Bank.
- John A. Maluccio, 2007.
"The Impact of Conditional Cash Transfers on Consumption and Investment in Nicaragua,"
Middlebury College Working Paper Series
0722, Middlebury College, Department of Economics.
- John Maluccio, 2010. "The Impact of Conditional Cash Transfers on Consumption and Investment in Nicaragua," Journal of Development Studies, Taylor & Francis Journals, vol. 46(1), pages 14-38.
- World Bank, 2005. "Shocks and Social Protection : Lessons from the Central American Coffee Crisis, Volume 1, Synthesis of Findings and Implications for Policy," World Bank Other Operational Studies 8435, The World Bank.
- Benjamin Davis & Paul Winters & Gero Carletto & Katia Covarrubias & Esteban Quinones & Alberto Zezza & Kostas Stamoulis & Genny Bonomi & Stefania DiGiuseppe, 2007.
"Rural Income Generating Activities; A Cross Country Comparison,"
07-16, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
- Davis, Benjamin & Covarrubias, Katia & Stamoulis, Kostas G. & Winters, Paul C. & Carletto, Calogero & Quinones, Esteban & Zezza, Alberto & Di Giuseppe, Stefania, 2007. "Rural Income Generating Activities: A Cross Country Comparison," 106th Seminar, October 25-27, 2007, Montpellier, France 7913, European Association of Agricultural Economists.
- Vakis, Renos & Kruger, Diana & Mason, Andrew D., 2004. "Shocks and coffee : lessons from Nicaragua," Social Protection Discussion Papers 30164, The World Bank.
- Bruno, Randolph Luca & Stampini, Marco, 2007.
"Joining Panel Data with Cross-Sections for Efficiency Gains: An Application to a Consumption Equation for Nicaragua,"
IZA Discussion Papers
3231, Institute for the Study of Labor (IZA).
- R. Bruno & M. Stampini, 2007. "Joining Panel Data with Cross-Sections for Efficiency Gains: an Application to a Consumption Equation for Nicaragua," Working Papers 619, Dipartimento Scienze Economiche, Universita' di Bologna.
- World Bank, 2004. "Drivers of Sustainable Rural Growth and Poverty Reduction in Central America : Nicaragua Case Study, Volume 2. Background Papers and Technical Appendices," World Bank Other Operational Studies 14557, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gustavo Anríquez) The email address of this maintainer does not seem to be valid anymore. Please ask Gustavo Anríquez to update the entry or send us the correct address.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.