Longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty. While a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty, this paper develops an asset-based approach to poverty analysis that makes it possible to distinguish deep-rooted, persistent structural poverty from poverty that passes naturally with time due to systemic growth processes. Drawing on the economic theory of poverty traps and bifurcated accumulation strategies, this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long-term, persistent structural poverty, as well as relevant extensions of the popular Foster-Greer-Thorbecke class of poverty measures. The paper closes with reflections on how asset-based poverty can be used to underwrite the design of persistent poverty reduction strategies.

https://www.tandfonline.com/doi/pdf/10.1080/00220380500405261

The economics of poverty traps and persistent poverty: An asset-based approach

Using panel data from villages in rural Ethiopia, the paper studies the determinants of consumption growth (1989-97), based on a microgrowth model, controlling for heterogeneity. Consumption grew substantially, but with diverse experiences across villages and individuals. A key focus is on whether shocks affect growth. Rainfall shocks have a substantial impact on consumption growth, and its impact presists for many years. There also appears to be a significant, persistent growth impact from the largescale famine in the 1980s, as well as substantial externalities from the presence of road infrastructure. The findings related to the persistent effects of rainfall shocks and the famine crisis imply that welfare losses due to the lack of insurance and protection measures are well beyond the welfare cost of short term consumption fluctuations.

Growth and Shocks: evidence from rural Ethiopia

Livelihoods, vulnerability and adaptation to climate change in Morogoro, Tanzania

Africa is thought to be the region most vulnerable to the impacts of climate variability and change. Agriculture plays a dominant role in supporting rural livelihoods and economic growth over most of Africa. Three aspects of the vulnerability of food crop systems to climate change in Africa are discussed: the assessment of the sensitivity of crops to variability in climate, the adaptive capacity of farmers, and the role of institutions in adapting to climate change. The magnitude of projected impacts of climate change on food crops in Africa varies widely among different studies. These differences arise from the variety of climate and crop models used, and the different techniques used to match the scale of climate model output to that needed by crop models. Most studies show a negative impact of climate change on crop productivity in Africa. Farmers have proved highly adaptable in the past to short- and long-term variations in climate and in their environment. Key to the ability of farmers to adapt to climate variability and change will be access to relevant knowledge and information. It is important that governments put in place institutional and macro-economic conditions that support and facilitate adaptation and resilience to climate change at local, national and transnational level.

/pdf/assessing-the-vulnerability-of-food-crop-systems-in-africa-2ecqoffmqu.pdf

Assessing the vulnerability of food crop systems in Africa to climate change

https://are.berkeley.edu/courses/ARE251/2004/papers/Dercon.pdf

Growth and shocks: evidence from rural ethiopia

Overview RISK AND INSURANCE: EVIDENCE 1. Risk, Insurance and Poverty: a review 2. Consumption Smoothing Across Space: Testing Theories of Risk-Sharing in the ICRISAT Study Region of South India RISK AND POVERTY: THEORY 3. The Two Poverties 4. Inequality and Risk RISK AND POVERTY PERSISTENCE 5. Household Income Dynamics in Rural China 6. Health, Shocks and Poverty Persistence 7. The Macroeconomic Repercussions of Agricultural Shocks and their Implications for Insurance IDENTIFYING THE VULNERABLE 8. Measuring Vulnerability to Poverty 9. Targeting and Informal Insurance RISK AND SOCIAL INSTITUTIONS 10. Risk-Sharing and Endogenous Network Formation 11. Is a Friend in Need a Friend Indeed? Inclusion and Exclusion in Mutual Insurance Networks in Southern Ghana 12. The Gradual Erosion of the Social Security Function of Customary Land Tenure Arrangements in Lineage-Based Societies SAFETY NETS AND SOCIAL INSTITUTIONS 13. Do Public Transfers Crowd Out Private Transfers? Evidence from a Randomized Experiment in Mexico 14. Food Aid and Informal Insurance 15. Why isn't there more Financial Intermediation in Developing Countries? DEVELOPING BETTER PROTECTION FOR THE POOR 16. Can Food-for-Work Programmes Reduce Vulnerability? 17. Learning from Visa(R)? Incorporating Insurance Provisions in Microfinance Contracts 18. Can Financial Markets be Tapped to Help Poor People Cope with Weather Risks? CONCLUSION 19. Risk, Poverty, and Public Action

Stefan Derson

Papers

Insurance against poverty