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Measuring Vulnerability and Poverty: Estimates for Rural India

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  • Gaiha, Raghav
  • Imai, Katsushi

Abstract

This paper measures the vulnerability of households in rural India, based upon the ICRISAT panel survey. We employ both ex ante and ex post measures of vulnerability. The latter are decomposed into aggregate and idiosyncratic risks and poverty components. Our decomposition shows that idiosyncratic risks account for the largest share, followed by poverty and aggregate risks. Despite some degree of risk-sharing, the landless or small farmers are vulnerable to idiosyncratic risks, forcing them to reduce consumption. Income augmenting policies therefore must be combined with those that not only reduce aggregate and idiosyncratic risks but also build resilience against them.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2008/rp2008-40.pdf
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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2008/40.

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Length: 32 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:unu:wpaper:rp2008-40

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Related research

Keywords: aggregate risks; idiosyncratic risks; poverty; vulnerability; semi-arid conditions;

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References

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  1. Imai, Katsushi & Raghav Gaiha, 2003. "Vulnerability, Shocks and Persistence of Poverty - Estimates for Semi-Arid Rural South India," Royal Economic Society Annual Conference 2003 111, Royal Economic Society.
  2. Bob Baulch & John Hoddinott, 2000. "Economic mobility and poverty dynamics in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 1-24.
  3. Hoddinott, John & Quisumbing, Agnes, 2003. "Methods for microeconometric risk and vulnerability assessments," Social Protection Discussion Papers 29138, The World Bank.
  4. Townsend, R.M., 1991. "Risk and Insurance in Village India," University of Chicago - Economics Research Center 91-3, Chicago - Economics Research Center.
  5. Ligon, Ethan, 2002. "Targeting and Informal Insurance," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  6. Pritchett, Lant & Suryahadi, Asep & Sumarto, Sudarno, 2000. "Quantifying vulnerability to poverty - a proposed measure, applied to Indonesia," Policy Research Working Paper Series 2437, The World Bank.
  7. Gamanou, Gisele & Morduch, Jonathan, 2002. "Measuring Vulnerability to Poverty," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  8. Ligon, Ethan & Laura Schechter, 2002. "Measuring Vulnerability," Royal Economic Society Annual Conference 2002 128, Royal Economic Society.
  9. Jacoby, Hanan G & Skoufias, Emmanuel, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Wiley Blackwell, vol. 64(3), pages 311-35, July.
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Citations

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Cited by:
  1. J.ntti, Markus & Kanbur, Ravi & Nyyss.l., Milla & Pirttil., Jukka, 2012. "Poverty and Welfare Measurement on the Basis of Prospect Theory," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  2. Andrews, Colin & Flores, Margarita, 2008. "Vulnerability to Hunger: Improving Food Crisis Responses in Fragile States," Working Paper Series RP2008/42, World Institute for Development Economic Research (UNU-WIDER).
  3. Lopez-Calva, Luis F. & Ortiz-Juarez, Eduardo, 2011. "A vulnerability approach to the definition of the middle class," Policy Research Working Paper Series 5902, The World Bank.
  4. Don J. Webber & Stephanié Rossouw, 2010. "Sub-national vulnerability measures:A spatial perspective," Working Papers 1004, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  5. Chameni Nembua, Célestin & Miamo Wendji, Clovis, 2010. "Les déterminants du niveau et de l’inégalité de la pauvreté au Cameroun : Une analyse de décomposition multidimensionnelle
    [Determinants of the level of inequality and poverty in Cameroon: A
    ," MPRA Paper 25215, University Library of Munich, Germany.
  6. Md. Shafiul Azam & Katsushi S. Imai, 2012. "Measuring Households' Vulnerability to Idiosyncratic and Covariate Shocks – the case of Bangladesh," Discussion Paper Series DP2012-02, Research Institute for Economics & Business Administration, Kobe University.
  7. Celidoni, Martina, 2011. "Vulnerability to poverty: An empirical comparison of alternative measures," MPRA Paper 33002, University Library of Munich, Germany.
  8. Mohiburrahman Iqbal, 2013. "Vulnerability to expected poverty in Afghanistan," ASARC Working Papers 2013-14, The Australian National University, Australia South Asia Research Centre.

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