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Growth and chronic poverty: Evidence from rural communities in Ethiopia

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  • Stefan Dercon
  • John Hoddinott
  • Tassew Woldehanna

Abstract

What keeps some people persistently poor, even in the context of relative high growth? In this paper, we explore this question using a 15-year longitudinal data set from Ethiopia. We compare the findings of an empirical growth model with those derived from a model of the determinants of chronic poverty. We ask whether the chronically poor are simply not benefiting in the same way from the same factors that allowed others to escape poverty, or whether there are latent factors that leave them behind? We find that this chronic poverty is associated with several initial characteristics: lack of physical assets, education, and ‘remoteness’ in terms of distance to towns or poor roads. The chronically poor appear to benefit from some of the drivers of growth, such as better roads or extension services in much the same way that the non-chronically poor benefit. However, they appear to have lower growth in this period, related to time-invariant characteristics, and this suggests that they face a considerable growth and standard of living handicap.

Suggested Citation

  • Stefan Dercon & John Hoddinott & Tassew Woldehanna, 2011. "Growth and chronic poverty: Evidence from rural communities in Ethiopia," CSAE Working Paper Series 2011-18, Centre for the Study of African Economies, University of Oxford.
  • Handle: RePEc:csa:wpaper:2011-18
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    References listed on IDEAS

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    1. Dercon, Stefan, 2004. "Growth and shocks: evidence from rural Ethiopia," Journal of Development Economics, Elsevier, pages 309-329.
    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. Andreou, Elena & Ghysels, Eric & Kourtellos, Andros, 2010. "Regression models with mixed sampling frequencies," Journal of Econometrics, Elsevier, pages 246-261.
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    5. Angus Deaton & Salman Zaidi, 1999. "Guidelines for Constructing Consumption Aggregates For Welfare Analysis," Working Papers 217, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    6. Michelle Adato & Michael Carter & Julian May, 2006. "Exploring poverty traps and social exclusion in South Africa using qualitative and quantitative data," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 226-247.
    7. Angus Deaton & Salman Zaidi, 2002. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," World Bank Publications, The World Bank, number 14101.
    8. Stefan Dercon & Daniel O. Gilligan & John Hoddinott & Tassew Woldehanna, 2007. "The impact of roads and agricultural extension on consumption growth and poverty in fifteen Ethiopian villages," CSAE Working Paper Series 2007-01, Centre for the Study of African Economies, University of Oxford.
    9. Michael Carter & Christopher Barrett, 2006. "The economics of poverty traps and persistent poverty: An asset-based approach," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 178-199.
    10. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, pages 112-156.
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    1. Le défi de l’accès et de la qualité de l’éducation dans les pays en développement
      by marine.talance@gmail.com (Marine de Talance) in BS Initiative on 2015-02-05 15:54:26

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    Cited by:

    1. Abegaz, Berhanu, 2013. "Aid, Accountability, and Institution-Building in Ethiopia: a Comparative Analysis of Donor Practice," WIDER Working Paper Series 083, World Institute for Development Economic Research (UNU-WIDER).
    2. Negash, Martha & Swinnen, Johan F.M., 2013. "Biofuels and food security: Micro-evidence from Ethiopia," Energy Policy, Elsevier, vol. 61(C), pages 963-976.
    3. Urquía-Grande, Elena & Rubio-Alcocer, Antonio, 2015. "Agricultural infrastructure donation performance: Empirical evidence in rural Ethiopia," Agricultural Water Management, Elsevier, vol. 158(C), pages 245-254.
    4. Duru, Maya Joan, 2016. "Too Certain to Invest? Public Safety Nets and Insurance Markets in Ethiopia," World Development, Elsevier, vol. 78(C), pages 37-51.
    5. Diaz, Yadira & Pudney, Stephen, 2013. "Measuring poverty persistence with missing data with an application to Peruvian panel data," ISER Working Paper Series 2013-22, Institute for Social and Economic Research.
    6. Khan, Qaiser & Faguet, Jean-Paul & Ambel, Alemayehu, 2017. "Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia," World Development, Elsevier, pages 326-342.
    7. Ejaz Gul & Imran Sharif Chaudhry, 2015. "Spatial Distribution of Socio-economic Inequality: Evidence from Inequality Maps of a Village in Tribal Region of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 793-808.
    8. repec:hal:journl:halshs-00830006 is not listed on IDEAS
    9. Stifel, David & Woldehanna, Tassew, 2014. "Utility-consistent poverty in Ethiopia, 2000.11: Welfare improvements in a changing economic landscape," WIDER Working Paper Series 125, World Institute for Development Economic Research (UNU-WIDER).
    10. Arndt, Channing & Hussain, M. Azhar & Salvucci, Vincenzo & Østerdal, Lars Peter, 2016. "Effects of food price shocks on child malnutrition: The Mozambican experience 2008/2009," Economics & Human Biology, Elsevier, pages 1-13.
    11. Monica Beuran & Marie Gachassin & Gaël Raballand, 2015. "Are There Myths on Road Impact and Transport in Sub-Saharan Africa?," Development Policy Review, Overseas Development Institute, pages 673-700.
    12. Jackeline Velazco & Ramon Ballester, 2016. "Food Access and Shocks in Rural Households: Evidence from Bangladesh and Ethiopia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, pages 527-549.
    13. Abro, Zewdu Ayalew & Alemu, Bamlaku Alamirew & Hanjra, Munir A., 2014. "Policies for Agricultural Productivity Growth and Poverty Reduction in Rural Ethiopia," World Development, Elsevier, vol. 59(C), pages 461-474.
    14. Ambaye, Guesh Gebremeske, 2012. "Perception of Poverty by Ethiopian Rural Households: Using a Self Reported approach," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 4(4), December.
    15. Hirvonen, Kalle & Bossuyt, Anne & Pigois, Remy, 2017. "Complementarities between social protection and health sector policies: Evidence from the Productive Safety Net Program in Ethiopia," ESSP working papers 112, International Food Policy Research Institute (IFPRI).
    16. Abafita, Jemal & Kim, Kyung-Ryang, 2014. "Determinants of Household Food Security in Rural Ethiopia: An Empirical Analysis," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 37(2), July.
    17. Marco d’Errico & Rebecca Pietrelli, 2017. "Resilience and child malnutrition in Mali," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, pages 355-370.
    18. Brauw, Alan de, 2015. "Migration, Youth, and Agricultural Productivity in Ethiopia," 2015 Allied Social Science Association (ASSA) Annual Meeting, January 3-5, 2015, Boston, Massachusetts 189684, Agricultural and Applied Economics Association.
    19. Campiglio, Emanuele, 2016. "Beyond carbon pricing: The role of banking and monetary policy in financing the transition to a low-carbon economy," Ecological Economics, Elsevier, pages 220-230.
    20. Van Campenhout, Bjorn & Ssekabira, Haruna & Aduayom, Dede H., 2014. "Consumption bundle aggregation in poverty measurement: Implications for poverty and its dynamics in Uganda," WIDER Working Paper Series 150, World Institute for Development Economic Research (UNU-WIDER).
    21. Martin Wiegand & Eric Koomen & Menno (M.) Pradhan & Christopher Edmonds, 2017. "The Impact of Road Development on Household Welfare in Rural Papua New Guinea," Tinbergen Institute Discussion Papers 17-076/V, Tinbergen Institute.
    22. Verkaart, Simone & Munyua, Bernard G. & Mausch, Kai & Michler, Jeffrey D., 2017. "Welfare impacts of improved chickpea adoption: A pathway for rural development in Ethiopia?," Food Policy, Elsevier, vol. 66(C), pages 50-61.

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