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Transient and Chronic Rural Household Poverty: Evidence from Kenya

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  • Milu Muyanga
  • Miltone Ayieko
  • Mary Bundi
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    Abstract

    Most of the earlier studies of poverty in Kenya have basically been static in nature. They have attempted to measure household welfare -- incidence, gap and severity -- at a point in time. Such studies are undeniably vital. However, they do not necessarily provide a good indication of welfare stability over time. This study makes an empirical contribution to poverty analysis in Kenya by incorporating poverty dynamics dimension. We first examine poverty dynamics using economic transition matrices. Next, we decompose total poverty into transient and chronic poverty components using transient poverty as censored fluctuation and equally-distributed equivalent poverty gaps approaches for comparison. The latter approach introduces inequality into poverty decomposition. Finally, we establish important correlates of poverty components using quantile-censored and non-parametric regressions. Given the high rural household poverty incidences and the country's limited resources, this study has critical implications for economic policy in Kenya.

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    Bibliographic Info

    Paper provided by PEP-PMMA in its series Working Papers PMMA with number 2007-20.

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    Date of creation: 2007
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    Handle: RePEc:lvl:pmmacr:2007-20

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    Keywords: Poverty dynamics; chronic poverty; transient poverty; transition matrices; panel data; inequality; Kenya;

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    References

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    1. Mwangi S. Kimenyi, 2005. "Efficiency and Efficacy of Kenya's Constituency Development Fund: Theory and Evidence," Working papers 2005-42, University of Connecticut, Department of Economics.
    2. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    3. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    4. Greer, Joel & Thorbecke, Erik, 1986. "A methodology for measuring food poverty applied to Kenya," Journal of Development Economics, Elsevier, vol. 24(1), pages 59-74, November.
    5. Greer, Joel & Thorbecke, Erik, 1986. "Food Poverty Profile Applied to Kenyan Smallholders," Economic Development and Cultural Change, University of Chicago Press, vol. 35(1), pages 115-41, October.
    6. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
    7. Arabmazar, Abbas & Schmidt, Peter, 1982. "An Investigation of the Robustness of the Tobit Estimator to Non-Normality," Econometrica, Econometric Society, vol. 50(4), pages 1055-63, July.
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    Cited by:
    1. Radeny, Maren & van den Berg, Marrit & Schipper, Rob, 2012. "Rural Poverty Dynamics in Kenya: Structural Declines and Stochastic Escapes," World Development, Elsevier, vol. 40(8), pages 1577-1593.

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