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Vulnerability, shocks and persistence of poverty: estimates for semi-arid rural South India

  • Raghav Gaiha
  • Katsushi Imai

This paper focuses on the vulnerability of rural households to poverty when a negative crop shock occurs. The analysis is based on the ICRISAT panel survey of households in a semi-arid region in south India during 1975-84. Using a dynamic panel data model that takes into account effects of crop shocks, an assessment of vulnerability of different groups of households is carried out. What is somewhat surprising is that even sections of relatively affluent households are highly vulnerable to long spells of poverty when severe crop shocks occur. As such crop shocks are frequent in a harsh production environment, there must be a shift of emphasis in anti-poverty measures from meeting income shortfalls among the poor to enabling the vulnerable to protect themselves better against these shocks.

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Article provided by Taylor & Francis Journals in its journal Oxford Development Studies.

Volume (Year): 32 (2004)
Issue (Month): 2 ()
Pages: 261-281

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Handle: RePEc:taf:oxdevs:v:32:y:2004:i:2:p:261-281
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  1. Neil McCulloch & Bob Baulch, 2000. "Simulating the impact of policy upon chronic and transitory poverty in rural Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 100-130.
  2. Morduch, Jonathan, 1998. "Poverty, economic growth, and average exit time," Economics Letters, Elsevier, vol. 59(3), pages 385-390, June.
  3. Alderman, Harold & Paxson, Christina H & DEC, 1992. "Do the poor insure? A synthesis of the literature on risk and consumption in developing countries," Policy Research Working Paper Series 1008, The World Bank.
  4. Neil McCulloch & Bob Baulch, 2000. "Simulating the Impact of Policy upon Chronic and Transitory Poverty in Rural Pakistan," Econometrics 0004003, EconWPA.
  5. World Bank, 2001. "Risk Management in South Asia : A Poverty Focused Approach," World Bank Other Operational Studies 15449, The World Bank.
  6. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
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