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Regional Agricultural Endowments and Shifts of Poverty Trap Equilibria: Evidence from Ethiopian Panel Data

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  • Stephen C. Smith

    () (Department of Economics/Institute for International Economic Policy, George Washington University)

  • Sungil Kwak

    () (Department of Economics/Institute for International Economic Policy, George Washington University)

Abstract

We introduce new approaches to research on poverty traps, focusing on changes in patterns of equilibria over time and across regions, applied to the Ethiopia Rural Household Survey. We revisit the incidence of multiple equilibria using new nonparametric techniques; we also emphasize conditions of single equilibria that remain stagnant below the poverty line. We identify a single equilibrium in our initial interval (1994 - 1999) but and evidence that a second, higher equilibrium is emerging in the subsequent (1999 - 2004) interval. One of three major regions exhibits a deeply impoverished equilibrium that does not improve despite a national environment of pro-poor growth.

Suggested Citation

  • Stephen C. Smith & Sungil Kwak, 2011. "Regional Agricultural Endowments and Shifts of Poverty Trap Equilibria: Evidence from Ethiopian Panel Data," Working Papers 2011-01, The George Washington University, Institute for International Economic Policy.
  • Handle: RePEc:gwi:wpaper:2011-01
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    Cited by:

    1. Stephen C. Smith & Ram Fishman & Vida BobicÌ & Munshi Sulaiman, "undated". "How Sustainable Are Benefits from Extension for Smallholder Farmers? Evidence from a Randomised Phase-Out of the BRAC Program in Uganda," Working Papers 2017-1, The George Washington University, Institute for International Economic Policy.
    2. Arunachalam, Raj & Shenoy, Ajay, 2017. "Poverty traps, convergence, and the dynamics of household income," Journal of Development Economics, Elsevier, vol. 126(C), pages 215-230.
    3. Barrett, Christopher B. & Santos, Paulo, 2014. "The impact of changing rainfall variability on resource-dependent wealth dynamics," Ecological Economics, Elsevier, vol. 105(C), pages 48-54.
    4. M. Shahe Emran & Virginia Robano & Stephen C. Smith, 2014. "Assessing the Frontiers of Ultrapoverty Reduction: Evidence from Challenging the Frontiers of Poverty Reduction/Targeting the Ultra-poor, an Innovative Program in Bangladesh," Economic Development and Cultural Change, University of Chicago Press, vol. 62(2), pages 339-380.

    More about this item

    Keywords

    poverty trap; Ethiopia; multiple equilibria; asset dynamics; regional poverty; sequence of equilibria;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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