Simulating the Impact of Policy upon Chronic and Transitory Poverty in Rural Pakistan
Anti-poverty programs often seek to improve their impact by targeting households for assistance according to one or more criteria. Since such targeting criteria are often based upon measurements of welfare in a single time period, they tend to be chosen to provide an indication of the long-run level of welfare. However a growing literature shows the importance to poor households of fluctuations in their welfare from month to month and year to year. This paper measures the extent to which poverty is caused by fluctuations in welfare as well as the long-run level of welfare, using the IFPRI household food security panel which tracked 686 households from rural Pakistan between 1986/76 to 1990/91. The article compares the poverty impact of policies designed to increase mean incomes ('growth' policies) and those designed to even out fluctuations of income over time ('smoothing policies') after making an explicit adjustment for measurement error. Since the majority of poverty in our sample is transitory, large reductions in poverty can be achieved by interventions designed to 'smooth' incomes, but reducing chronic poverty in the long-term will require large and sustained growth in household incomes. The income generation process is then modelled as a function of household characteristics and the resulting model is used to estimate the poverty impact of a range of interventions including transfer policies and measures designed to build human and physical capital.
|Date of creation:||02 Aug 2000|
|Date of revision:|
|Note:||Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP; pages: 46 ; figures: included|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alderman, Harold & Paxson, Christina H & DEC, 1992.
"Do the poor insure? A synthesis of the literature on risk and consumption in developing countries,"
Policy Research Working Paper Series
1008, The World Bank.
- 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.
- Altonji, Joseph G & Siow, Aloysius, 1987.
"Testing the Response of Consumption to Income Changes with (Noisy) Panel Data,"
The Quarterly Journal of Economics,
MIT Press, vol. 102(2), pages 293-328, May.
- Joseph G. Altonji & Aloysius Siow, 1986. "Testing the Response of Consumption to Income Changes with (Noisy) PanelData," NBER Working Papers 2012, National Bureau of Economic Research, Inc.
- Alderman, Harold & Garcia, Marito, 1993. "Poverty, household food security, and nutrition in rural Pakistan:," Research reports 96, International Food Policy Research Institute (IFPRI).
- Alderman, Harold, 1996. "Saving and economic shocks in rural Pakistan," Journal of Development Economics, Elsevier, vol. 51(2), pages 343-365, December.
- Adams, Richard H. Jr. & He, Jane J., 1995. "Sources of income inequality and poverty in rural Pakistan:," Research reports 102, International Food Policy Research Institute (IFPRI).
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpem:0004003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)
If references are entirely missing, you can add them using this form.