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Nonlinear dynamics of livestock assets: Evidence from Ethiopia

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  • Van Campenhout, Bjorn
  • Dercon, Stefan

Abstract

Recent research on the intertemporal dynamics of poverty using microeconomic data often hints at the existence of poverty traps, where some find themselves trapped at a low-level stable equilibrium while others enjoy a higher stable equilibrium. Without a sizable positive shock to well-being, those trapped at the low equilibrium will not automatically outgrow destitution, but merely fluctuate around that low-level equilibrium. Given the dramatic policy consequences implied by such a theory, knowledge about the location of the different equilibria would be extremely helpful. In this paper, we explore the possibilities of threshold-type models to identify those crucial parameters. We illustrate the method by searching for traps in the dynamics of livestock asset holdings in rural Ethiopia. We find evidence of distribution-dependent dynamics and multiple equilibria for tropical livestock units.

Suggested Citation

  • Van Campenhout, Bjorn & Dercon, Stefan, 2012. "Nonlinear dynamics of livestock assets: Evidence from Ethiopia," IFPRI discussion papers 1215, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:1215
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    References listed on IDEAS

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    Cited by:

    1. Debela, Bethelhem Legesse, 2016. "Factors affecting differences in livestock asset ownership between male and female-headed households in northern Ethiopia," 2016 AAAE Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246906, African Association of Agricultural Economists (AAAE).

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    Keywords

    microeconomics; data; Livestock; Assets; livestock assets; multiple equilibria; Poverty traps; Market equilibrium; Rural areas;

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