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Consumption growth and spatial poverty traps: an analysis of the effect of social services and community infrastructures on living standards in rural Peru

  • Philippe De Vreyer

    ()

    (DIAL, Paris)

  • Javier Herrera

    ()

    (DIAL, Paris)

  • Sandrine Mesplé-Somps

    ()

    (DIAL, Paris)

We test the effect of local geographic endowment of capital on household growth in living standards in rural Peru, using a four years unbalanced panel data set. Our theoretical model of household consumption growth allows for the effect of community variables to modify the returns to augmented capital in the household production function. Three different sources of data are used: the ENAHO 1997-2000 household surveys, the population census of 1993 and the district infrastructure census of 1997. Altogether the addition of these different data sources makes an unusually rich data set, at least when considered with developing country standards. As in Jalan and Ravallion (2002), we use a quasi-differencing method to identify the impact of locally determined geographic and socioeconomic variables, while removing unobserved household and community level fixed effects. GMM are then used to estimate the model parameters. Several significant interesting results appear, confirming that private consumption growth depends on local geographic variables.

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File URL: http://www2.vwl.wiso.uni-goettingen.de/ibero/working_paper_neu/DB124.pdf
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Paper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 124.

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Length: 35 pages
Date of creation: 21 Oct 2005
Date of revision:
Handle: RePEc:got:iaidps:124
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  1. 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.
  2. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
  3. Stifel, David & Alderman, Harold, 2003. "The"Glass of Milk"subsidy program and malnutrition in Peru," Policy Research Working Paper Series 3089, The World Bank.
  4. Escobal, Javier & Torero, Maximo, 2003. "Adverse Geography and Differences in Welfare in Peru," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Ravallion, Martin & Wodon, Quentin, 1997. "Poor areas, or only poor people?," Policy Research Working Paper Series 1798, The World Bank.
  6. Jyotsna Jalan & Martin Ravallion, 1998. "Geographic Poverty Traps?," Boston University - Institute for Economic Development 86, Boston University, Institute for Economic Development.
  7. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods And Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1243-1284, November.
  8. Javier Herrera, 2001. "Poverty dynamics in Peru, 1997-1999," Working Papers DT/2001/09, DIAL (Développement, Institutions et Mondialisation).
  9. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
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  17. repec:att:wimass:9327 is not listed on IDEAS
  18. Máximo Torero & Javier Escobal, 2000. "Does Geography Explain Differences in Economic Growth in Peru?," Research Department Publications 3103, Inter-American Development Bank, Research Department.
  19. Ahn, Seung Chan & Hoon Lee, Young & Schmidt, Peter, 2001. "GMM estimation of linear panel data models with time-varying individual effects," Journal of Econometrics, Elsevier, vol. 101(2), pages 219-255, April.
  20. Edmundo Murrugarra & Martin Valdivia, 1999. "The Returns to Health for Peruvian Urban Adults: Differentials Across Genders, the Life Cycle and the Wage Distribution," Research Department Publications 3050, Inter-American Development Bank, Research Department.
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  23. Miguel, Edward & Gugerty, Mary Kay, 2005. "Ethnic diversity, social sanctions, and public goods in Kenya," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2325-2368, December.
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