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Measuring Vulnerability and Poverty: Estimates for Rural India

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  • Gaiha, Raghav
  • Imai, Katsushi

Abstract

This paper measures the vulnerability of households in rural India, based upon the ICRISAT panel survey. We employ both ex ante and ex post measures of vulnerability. The latter are decomposed into aggregate and idiosyncratic risks and poverty components. Our decomposition shows that idiosyncratic risks account for the largest share, followed by poverty and aggregate risks. Despite some degree of risk-sharing, the landless or small farmers are vulnerable to idiosyncratic risks, forcing them to reduce consumption. Income augmenting policies therefore must be combined with those that not only reduce aggregate and idiosyncratic risks but also build resilience against them.

Suggested Citation

  • Gaiha, Raghav & Imai, Katsushi, 2008. "Measuring Vulnerability and Poverty: Estimates for Rural India," WIDER Working Paper Series 040, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:rp2008-40
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    1. repec:spr:soinre:v:134:y:2017:i:1:d:10.1007_s11205-016-1419-x is not listed on IDEAS
    2. Don J. Webber & Stephanié Rossouw, 2010. "Sub-national vulnerability measures:A spatial perspective," Working Papers 1004, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    3. Edmund Amann & David Lawson, 2013. "International Crises And Developing Economies: Linkages And Recent Experiences," Journal of International Development, John Wiley & Sons, Ltd., vol. 25(8), pages 1035-1049, November.
    4. Andrews, Colin & Flores, Margarita, 2008. "Vulnerability to Hunger: Improving Food Crisis Responses in Fragile States," WIDER Working Paper Series 042, World Institute for Development Economic Research (UNU-WIDER).
    5. Luis López-Calva & Eduardo Ortiz-Juarez, 2014. "A vulnerability approach to the definition of the middle class," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(1), pages 23-47, March.
    6. Celidoni, Martina, 2011. "Vulnerability to poverty: An empirical comparison of alternative measures," MPRA Paper 33002, University Library of Munich, Germany.
    7. Markus Jäntti & Ravi Kanbur & Milla Nyyssölä & Jukka Pirttilä, 2014. "Poverty and Welfare Measurement on the Basis of Prospect Theory," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 182-205, March.
    8. Md. Shafiul Azam & Katsushi S. Imai, 2012. "Measuring Households' Vulnerability to Idiosyncratic and Covariate Shocks – the case of Bangladesh," Discussion Paper Series DP2012-02, Research Institute for Economics & Business Administration, Kobe University.
    9. Zhang Huafeng, 2016. "Household vulnerability and economic status during disaster recovery and its determinants: a case study after the Wenchuan earthquake," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 83(3), pages 1505-1526, September.
    10. Chameni Nembua, Célestin & Miamo Wendji, Clovis, 2010. "Les déterminants du niveau et de l’inégalité de la pauvreté au Cameroun : Une analyse de décomposition multidimensionnelle
      [Determinants of the level of inequality and poverty in Cameroon: A multid
      ," MPRA Paper 25215, University Library of Munich, Germany.
    11. Mohiburrahman Iqbal, 2013. "Vulnerability to expected poverty in Afghanistan," ASARC Working Papers 2013-14, The Australian National University, Australia South Asia Research Centre.
    12. Satya R. Chakravarty & Nachiketa Chattopadhyay & Jacques Silber & Guanghua Wan, 2016. "Measuring the impact of vulnerability on the number of poor: a new methodology with empirical illustrations," Chapters,in: The Asian ‘Poverty Miracle’, chapter 4, pages 84-117 Edward Elgar Publishing.

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    Keywords

    aggregate risks; idiosyncratic risks; poverty; vulnerability; semi-arid conditions;

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