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Determinants of Welfare Dynamics in Rural Nicaragua

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  • Kristian Thor Jakobsen

    (UNEP Risoe Centre on Energy, Climate and Sustainable Development, Roskilde, Denmark)

Abstract

This article explores the determinants of poverty movements in rural Nicaragua by introducing a bivariate probate model, making it possible to treat the initial state of poverty as endogenous and thus avoiding introducing selection bias. The results indicate that this is relevant when exploring welfare dynamics in rural Nicaragua, as initially poor households face a higher probability of being poor in the subsequent period compared with non-poor households. It is also found that household composition, access to non-agriculture wage income and ownership of productive assets are important factors in explaining poverty movements. Moreover, climate-related shocks such as droughts and pest attacks not only have persistent and adverse impacts on household consumption, but also affect households’ productive asset holdings, which could affect their income-generating potential in the longer term.Cet article étudie les déterminants des dynamiques de pauvreté dans les zones rurales du Nicaragua au travers d’un modèle probit bivarié, ce qui permet de traiter comme endogène l’état initial de pauvreté, et ainsi d’éviter un biais de sélection. Les résultats indiquent que ceci est particulièrement pertinent dès lors que l’on s’intéresse aux dynamiques de ménages initialement pauvres qui ont une probabilité plus forte de rester pauvres que des ménages non-pauvres, suite à une période de temps déterminée. On constate également que la composition des ménages, le fait qu’ils aient accès ou pas à des revenus autres que des salaires agricoles, ou bien qu’ils possèdent des actifs de production, sont tous des facteurs importants pour expliquer les dynamiques de pauvreté. De plus, les chocs liés au climat, comme les sécheresses et les invasions de déprédateurs ont non seulement des conséquences persistantes et négatives sur la consommation des ménages, mais aussi sur la capacité de ces derniers à préserver leurs actifs de production, ce qui, à long terme pourrait réduire leur potentiel de création de revenus.

Suggested Citation

  • Kristian Thor Jakobsen, 2011. "Determinants of Welfare Dynamics in Rural Nicaragua," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 23(3), pages 371-388, July.
  • Handle: RePEc:pal:eurjdr:v:23:y:2011:i:3:p:371-388
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