Welfare dynamics in rural Kenya and Madagascar
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Date
2006Author
Wangila, Justine
Rasambainarivo, Jhon
Randrianarisoa, Jean Claude
Place, Frank
Oluoch-Kosura, Willis
Murithi, Festus
Minten, Bart
Mcpeak, John
Marenya, Paswel Phiri
Barretta, Christopher B
Type
ArticleLanguage
enMetadata
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This paper presents comparative qualitative and quantitative evidence from rural Kenya and Madagascar in an attempt to untangle the causality behind persistent poverty. We find striking differences in welfare dynamics depending on whether one uses total income, including stochastic terms and inevitable measurement error, or the predictable, structural component of income based on a household's asset holdings. Our results suggest the existence of multiple dynamic asset and structural income equilibria, consistent with the poverty traps hypothesis. Furthermore, we find supporting evidence of locally increasing returns to assets and of risk management behaviour consistent with poor households' defence of a critical asset threshold through asset smoothing.
Citation
The Journal of Development Studies Volume 42, Issue 2, 2006Publisher
Department of Agricultural Economics