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Vulnerability, Shocks and Persistence of Poverty - Estimates for Semi-Arid Rural South India

  • Katsushi Imai
  • Raghav Gaiha

This paper focuses on vulnerability of rural households to poverty when a negative crop shock occurs. Of particular concern is the possibilty of some sections experiencing long spells of poverty as a consequence of such shocks. The analysis is based on the ICRISAT panel survey of households in a semi-arid region in south India during 1975-84. Using alternative specifications that take into account direct effects of crop shocks as well as their indirect effects through asset adjustment, an assessment of vulnerability of different groups of households (e.g. classified on the basis of caste affiliation) is carried out. Whether transfers of land and non-land assets would reduce significantly their vulnerability is also examined. A reorientation of anti-poverty strategy is necessary to avoid welfare losses from negative crop shocks that are frequent and occasionally large.

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File URL: http://www.economics.ox.ac.uk/materials/working_papers/paper128.pdf
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 128.

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Date of creation: 01 Nov 2002
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Handle: RePEc:oxf:wpaper:128
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  1. Alderman, H. & Paxson, C.H., 1992. "Do the Poor Insure? A Synthesis of the Literature on Risk and Consumption in Developing Countries," Papers 164, Princeton, Woodrow Wilson School - Development Studies.
  2. World Bank, 2001. "Risk Management in South Asia : A Poverty Focused Approach," World Bank Other Operational Studies 15449, The World Bank.
  3. 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.
  4. Neil McCulloch & Bob Baulch, 2000. "Simulating the Impact of Policy upon Chronic and Transitory Poverty in Rural Pakistan," Econometrics 0004003, EconWPA.
  5. 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.
  6. Morduch, Jonathan, 1998. "Poverty, economic growth, and average exit time," Economics Letters, Elsevier, vol. 59(3), pages 385-390, June.
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