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Transient seasonal and chronic poverty of peasants: evidence from Rwanda

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  • Christophe Muller

Abstract

Using panel data from Rwanda, we estimate seasonal transient and chronic poverty indices, for different poverty line, poverty indicators, equivalence scale, and with and without the corrections for price variability and for the sampling scheme. We also estimate sampling standard errors for the poverty indices. The worse poverty crises occur after the dry season at the end of the year. Most of the severity of poverty comes from the seasonal transient component of annual poverty, while the seasonal component of the incidence of poverty is much smaller. Thus, the actual differences of the severity of poverty either between developing and industrial countries or between rural and urban areas in LDCs, may be much worse than what is shown by usual chronic annual poverty measures or by measures of seasonal incidence of poverty. The importance of the transient component suggests a need for income stabilisation policy. However, the contribution of the global transient seasonal poverty is important for household clustered around the poverty line but low for the poorest part of the chronically poor. Thus, policies fighting seasonal transient poverty are likely to concern the moderately poor rather than the very poor, as compared with policies against chronic poverty, which affect the very poor. The probability transition analysis across seasonal living standard distributions shows that mobility across quintiles is always very strong. The poverty crisis in the last season is more the result of many peasants falling into poverty than a decrease in the flow out of poverty. A safety net policy aimed at the poor and the non-poor at this period would then be appropriate. We estimate equations of quantiles for household chronic and transient seasonal poverty. The agricultural choices of peasants are found to affect differently the two components of annual poverty that could therefore be addressed by a combination of policies specific to each component.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number WPS/1997-08.

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Date of creation: 01 Apr 1997
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Handle: RePEc:oxf:wpaper:wps/1997-08

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Citations

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Cited by:
  1. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Medición y análisis de la pobreza
    [Poverty Measurement and Analysis]
    ," MPRA Paper 10491, University Library of Munich, Germany.
  2. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Измерение И Анализ Бедности
    [Poverty Measurement and Analysis]
    ," MPRA Paper 10492, University Library of Munich, Germany.
  3. Christiaensen, Luc & Scott, Christopher & Wodon, Quentin, 2002. "Poverty Measurement and Analysis," MPRA Paper 45362, University Library of Munich, Germany.
  4. Christophe Muller, 1998. "The measurement of dynamic poverty with geographical and intertemporal price variability: evidence from Rwanda," Economics Series Working Papers WPS/1998-06, University of Oxford, Department of Economics.
  5. Shahin Yaqub, 2003. "Relating Severe Poverty and Chronic Poverty," Working Papers wpdea0307, Department of Applied Economics at Universitat Autonoma of Barcelona.
  6. Mckay, Andrew & Lawson, David, 2003. "Assessing the Extent and Nature of Chronic Poverty in Low Income Countries: Issues and Evidence," World Development, Elsevier, vol. 31(3), pages 425-439, March.
  7. Katsushi Imai, 2003. "The Employment Guarantee Scheme as a Social Safety Net - Poverty Dynamics and Poverty Alleviation," Economics Series Working Papers 149, University of Oxford, Department of Economics.
  8. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Mesure et analyse de la pauvreté
    [Poverty Measurement and Analysis]
    ," MPRA Paper 10490, University Library of Munich, Germany.
  9. Asep Suryahadi & Wenefrida Widyanti & Sudarno Sumarto, 2003. "Short-term poverty dynamics in rural Indonesia during the economic crisis," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(2), pages 133-144.

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