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Transient poverty in rural China

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Author Info

  • Jalan, Jyotsna
  • Ravallion, Martin

Abstract

The authors study transient poverty in a six-year panel dataset for a sample of 5,000 households in post-reform rural China. Half of the mean squared poverty gap is transient, in that it is directly attributable to fluctuations in consumption over time. There is enough transient poverty to treble the cost of eliminating chronic poverty when targeting solely according to current consumption - and to title the balance in favor of untargeted transfers. Transient poverty is low among the chronically poorest, and tends to be high among those near the poverty line. Using censored quantile regression techniques, the authors find that systemic factors determine transient poverty, although they are generally congruent with the determinants of chronic poverty. There is little to suggest that the two types of poverty are created by fundamentally different processes. It appears that the same things that would help reduce chronic poverty - higher and more secure farm yield and higher levels of physical and human capital - would also help reduce transient poverty.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1616.

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Date of creation: 30 Jun 1996
Date of revision:
Handle: RePEc:wbk:wbrwps:1616

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Related research

Keywords: Health Economics&Finance; Environmental Economics&Policies; Poverty Reduction Strategies; Services&Transfers to Poor; Poverty Monitoring&Analysis; Safety Nets and Transfers; Services&Transfers to Poor; Poverty Assessment; Poverty Reduction Strategies; Rural Poverty Reduction;

References

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  1. Foster, James E & Shorrocks, Anthony F, 1991. "Subgroup Consistent Poverty Indices," Econometrica, Econometric Society, vol. 59(3), pages 687-709, May.
  2. Chaudhuri, Shubham & Ravallion, Martin, 1994. "How well do static indicators identify the chronically poor?," Journal of Public Economics, Elsevier, vol. 53(3), pages 367-394, March.
  3. Powell, James L., 1984. "Least absolute deviations estimation for the censored regression model," Journal of Econometrics, Elsevier, vol. 25(3), pages 303-325, July.
  4. William Gould, 1993. "Quantile regression with bootstrapped standard errors," Stata Technical Bulletin, StataCorp LP, vol. 2(9).
  5. Lanjouw, Peter & Ravallion, Martin, 1995. "Poverty and Household Size," Economic Journal, Royal Economic Society, vol. 105(433), pages 1415-34, November.
  6. Morduch, Jonathan, 1994. "Poverty and Vulnerability," American Economic Review, American Economic Association, vol. 84(2), pages 221-25, May.
  7. Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-82, December.
  8. Slesnick, Daniel T, 1993. "Gaining Ground: Poverty in the Postwar United States," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 1-38, February.
  9. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July.
  10. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
  11. Pagan, Adrian & Vella, Frank, 1989. "Diagnostic Tests for Models Based on Individual Data: A Survey," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages S29-59, Supplemen.
  12. Lipton, Michael & Ravallion, Martin, 1993. "Poverty and policy," Policy Research Working Paper Series 1130, The World Bank.
  13. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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Citations

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Cited by:
  1. Gamba, Paul & Mghenyi, Elliot W., 2005. "Rural Poverty Dynamics, Agricultural Productivity and Access to Resources," Food Security Collaborative Working Papers 55165, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  2. Claire Gondard-Delcroix, 2005. "Dynamiques de pauvreté en milieu rural malgache," Documents de travail 111, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
  3. 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.
  4. Bigsten, Arne & Shimeles, Abebe, 2004. "Dynamics of Poverty in Ethiopia," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).

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