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Estimating household vulnerability to poverty from cross section data: an empirical evidence from Ghana

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  • Novignon, Jacob

Abstract

Background In many developing countries, policies aimed at improving welfare through poverty reduction tend to target the current poor to the neglect of the vulnerable. An understanding of household susceptibility to future poverty will be crucial for sustainable growth and development. The objective of the study is to assess ex-ante welfare through vulnerability to poverty estimates among households in Ghana and to examine the effect of various socioeconomic characteristics on vulnerability to poverty. Method The study uses cross section data from the fifth round of the Ghana Living Standards Survey (GLSS) with a nationally representative sample of 8,687 households from all administrative regions in Ghana. The study employs a three step Feasible Generalized Least Squares (FGLS) estimation procedure to estimate vulnerability to poverty and to model the effect of household socioeconomic status on expected future consumption and variations in future consumption. Results The results show that, about 56% of households in Ghana are vulnerable to poverty and this is significantly higher than observed poverty level of about 28%. While the Eastern region was found to have the highest average vulnerability of approximately 73%, the Upper West region had the least vulnerability with about 21% average vulnerability to poverty. Other regions with relatively high incidence of vulnerability to poverty include the Western region (70%) and the Volta region (69%). Vulnerability to poverty was estimated to be 61% among urban households and 25% among rural households. Moreover, household health status, household size and education attainments significantly influence vulnerability to poverty. Male headed households were found to be less vulnerable to future poverty. Conclusion The results suggest that poverty and vulnerability to poverty are independent concepts. This implies that policies directed towards poverty reduction need to take into account the vulnerability of current non-poor households. Also, various household characteristics should be considered in developing poverty reduction strategies.

Suggested Citation

  • Novignon, Jacob, 2010. "Estimating household vulnerability to poverty from cross section data: an empirical evidence from Ghana," MPRA Paper 39900, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:39900
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    References listed on IDEAS

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    Cited by:

    1. Thang T. Vo, 2018. "Social capital and household vulnerability: New evidence from rural Vienam," WIDER Working Paper Series wp-2018-167, World Institute for Development Economic Research (UNU-WIDER).
    2. Evans Tindana Awuni & Daniele Malerba & Babette Never, 2023. "Understanding Vulnerability to Poverty, COVID-19’s Effects, and Implications for Social Protection: Insights from Ghana," Progress in Development Studies, , vol. 23(3), pages 246-274, July.
    3. Thang Vo, 2018. "Social capital and household vulnerability: New evidence from rural Vietnam," WIDER Working Paper Series 167, World Institute for Development Economic Research (UNU-WIDER).
    4. Vo, Thang T., 2018. "Household vulnerability as expected poverty in Vietnam," World Development Perspectives, Elsevier, vol. 10, pages 1-14.

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    More about this item

    Keywords

    Vulnerability to poverty; ex-ante welfare; poverty; Ghana;
    All these keywords.

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics

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