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Transient and Chronic Rural Household Poverty: Evidence from Kenya

Author

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  • Milu Muyanga
  • Miltone Ayieko
  • Mary Bundi

Abstract

Most of the earlier studies of poverty in Kenya have basically been static in nature. They have attempted to measure household welfare -- incidence, gap and severity -- at a point in time. Such studies are undeniably vital. However, they do not necessarily provide a good indication of welfare stability over time. This study makes an empirical contribution to poverty analysis in Kenya by incorporating poverty dynamics dimension. We first examine poverty dynamics using economic transition matrices. Next, we decompose total poverty into transient and chronic poverty components using transient poverty as censored fluctuation and equally-distributed equivalent poverty gaps approaches for comparison. The latter approach introduces inequality into poverty decomposition. Finally, we establish important correlates of poverty components using quantile-censored and non-parametric regressions. Given the high rural household poverty incidences and the country's limited resources, this study has critical implications for economic policy in Kenya.

Suggested Citation

  • Milu Muyanga & Miltone Ayieko & Mary Bundi, 2007. "Transient and Chronic Rural Household Poverty: Evidence from Kenya," Working Papers PMMA 2007-20, PEP-PMMA.
  • Handle: RePEc:lvl:pmmacr:2007-20
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    File URL: https://portal.pep-net.org/documents/download/id/13550
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    References listed on IDEAS

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    1. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    2. Arabmazar, Abbas & Schmidt, Peter, 1982. "An Investigation of the Robustness of the Tobit Estimator to Non-Normality," Econometrica, Econometric Society, vol. 50(4), pages 1055-1063, July.
    3. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    4. Greer, Joel & Thorbecke, Erik, 1986. "Food Poverty Profile Applied to Kenyan Smallholders," Economic Development and Cultural Change, University of Chicago Press, vol. 35(1), pages 115-141, October.
    5. Greer, Joel & Thorbecke, Erik, 1986. "A methodology for measuring food poverty applied to Kenya," Journal of Development Economics, Elsevier, pages 59-74.
    6. Mwangi S. Kimenyi, 2005. "Efficiency and Efficacy of Kenya's Constituency Development Fund: Theory and Evidence," Working papers 2005-42, University of Connecticut, Department of Economics.
    7. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
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    Citations

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    Cited by:

    1. Radeny, Maren & van den Berg, Marrit & Schipper, Rob, 2012. "Rural Poverty Dynamics in Kenya: Structural Declines and Stochastic Escapes," World Development, Elsevier, vol. 40(8), pages 1577-1593.
    2. Salehi-Isfahani, Djavad & Majbouri, Mehdi, 2013. "Mobility and the dynamics of poverty in Iran: Evidence from the 1992–1995 panel survey," The Quarterly Review of Economics and Finance, Elsevier, vol. 53(3), pages 257-267.
    3. Suri, Tavneet & Tschirley, David L. & Irungu, Charity & Gitau, Raphael & Kariuki, Daniel, 2008. "Rural Incomes, Inequality and Poverty Dynamics in Kenya," Working Papers 202613, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    4. Mai, Tung & Mahadevan, Renuka, 2016. "A research note on the poverty dynamics and cost of poverty inequality: Case study of Indonesia," Economic Analysis and Policy, Elsevier, vol. 49(C), pages 100-107.

    More about this item

    Keywords

    Poverty dynamics; chronic poverty; transient poverty; transition matrices; panel data; inequality; Kenya;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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