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Changes in Poverty in Rural Ethiopia 1989-1995: Measurement, Robustness Tests and Decomposition

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  • Stefan Dercon
  • Pramila Krishnan

Abstract

Assessing changes in poverty levels over time is bedevilled by problems in questionnaire design, the choice of the poverty line, the exact timing of the survey and uncertainty about the appropriate cost-of-living deflators. In this paper, we focus on testing the robustness of measured changes in poverty to these common problems, using household panel data collected in rural Ethiopia in 1989, 1994 and 1995: in particular, we implement a simple graphical technique for assessing the impact of uncertainity in measured inflation rates. We find that poverty declined between 1989 and 1994, but remained virtually unchanged between 1994 and 1995. However, the last result disguises substantial seasonal fluctuations in 1994. We also find that households with substantial human and physical capital, and better access to roads and towns have both lower poverty levels and are more likely to get better off over time. Human capital and access to roads and towns also reduce the fluctuations in poverty across the seasons.

Suggested Citation

  • Stefan Dercon & Pramila Krishnan, 1998. "Changes in Poverty in Rural Ethiopia 1989-1995: Measurement, Robustness Tests and Decomposition," Working Papers Department of Economics ces9819, KU Leuven, Faculty of Economics and Business, Department of Economics.
  • Handle: RePEc:ete:ceswps:ces9819
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    Cited by:

    1. Stephen C. Smith & Sungil Kwak, 2011. "Multidimensional Poverty and Interlocking Poverty Traps: Framework and Application to Ethiopian Household Panel Data," Working Papers 2011-04, The George Washington University, Institute for International Economic Policy.
    2. Ayalew, Tekabe, 2003. "Nutrition-productivity link and the persistence of poverty," IOB Discussion Papers 2003.02, Universiteit Antwerpen, Institute of Development Policy (IOB).
    3. Adugna Lemi, 2012. "Trade Liberalization and Change in Poverty Status in Rural Ethiopia: What are the Links?," International Economic Journal, Taylor & Francis Journals, vol. 26(4), pages 609-633, August.
    4. Hagos, Fitsum & Erkossa, Teklu & Lefore, Nicole & Langan, Simon, 2014. "Spate irrigation and poverty in Ethiopia," IWMI Conference Proceedings 208908, International Water Management Institute.
    5. Jayne, T. S. & Yamano, Takashi & Weber, Michael T. & Tschirley, David & Benfica, Rui & Chapoto, Antony & Zulu, Ballard, 2003. "Smallholder income and land distribution in Africa: implications for poverty reduction strategies," Food Policy, Elsevier, vol. 28(3), pages 253-275, June.
    6. Catherine Porter, 2012. "Shocks, Consumption and Income Diversification in Rural Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 48(9), pages 1209-1222, September.
    7. Yonas Alem & Gunnar Köhlin, 2014. "The Impact of Food Price Inflation on Subjective Well-being: Evidence From Urban Ethiopia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 116(3), pages 853-868, May.
    8. 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.
    9. Sungil Kwak & Stephen C. Smith, 2013. "Regional Agricultural Endowments and Shifts of Poverty Trap Equilibria: Evidence from Ethiopian Panel Data," Journal of Development Studies, Taylor & Francis Journals, vol. 49(7), pages 955-975, July.
    10. Liverpool, Lenis Saweda O. & Winter-Nelson, Alex, 2010. "Asset versus consumption poverty and poverty dynamics in the presence of multiple equilibria in rural Ethiopia," IFPRI discussion papers 971, International Food Policy Research Institute (IFPRI).
    11. Seetanah, B. & Ramessur, S. & Rojid, S., 2009. "Does Infrastructure Alleviates Poverty in Developing Countries?," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 9(2).
    12. Christelle Swanepoel, 2005. "Poverty and Poverty Dynamics in Rural Ethiopia," Working Papers 03/2005, Stellenbosch University, Department of Economics.
    13. 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.
    14. Rogg, Christian, 2006. "Asset Portfolios in Africa: Evidence from Rural Ethiopia," WIDER Working Paper Series 145, World Institute for Development Economic Research (UNU-WIDER).
    15. Raghav Gaiha, 2003. "Are Millennium Goals of Poverty Reduction Useful?," Oxford Development Studies, Taylor & Francis Journals, vol. 31(1), pages 59-84.
    16. Sharada Weir, 1999. "The effects of education on farmer productivity in rural Ethiopia," CSAE Working Paper Series 1999-07, Centre for the Study of African Economies, University of Oxford.
    17. Lei Pan, 2009. "Risk Pooling through Transfers in Rural Ethiopia," Economic Development and Cultural Change, University of Chicago Press, vol. 57(4), pages 809-835, July.
    18. Bogale, Ayalneh & Hagedorn, Konrad & Korf, Benedikt, 2003. "Why Does Poverty Persist In Rural Ethiopia?," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25857, International Association of Agricultural Economists.
    19. McCulloch, Neil & Calandrino, Michele, 2003. "Vulnerability and Chronic Poverty in Rural Sichuan," World Development, Elsevier, vol. 31(3), pages 611-628, March.
    20. Tsehay, Abrham Seyoum & Bauer, Siegfried, 2012. "Poverty Dynamics and Vulnerability: Empirical Evidence from Smallholders in Northern Highlands of Ethiopia," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126873, International Association of Agricultural Economists.

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