Poverty Profile and Dynamics

Question 1

general patterns in low income countries

Answer 1

• households live on < $1.90 per person per day
• typical poor family has 6-12 members
• extended household structure
• high young to old ratio
• food represents 1/2 to 3/4 total consumption
• multiple income sources
• low investment in health and education
• risk-averse

Question 2

antipoverty programs not financially sustainable without…

Answer 2

increased government revenues and/or without increased personal saving or formal insurance

Question 3

Baulch and McCulloch

Answer 3

poverty problem is one involving large turnover of vulnerable people rather than hardcore of chronically poor

Question 4

ways of measuring dynamics of poverty

Answer 4

• panel data based on income and consumption
• repeated cross sectional surveys
• measures at point in time that captures dynamics

Question 5

two main methods to identify and measure chronic poverty (yaqub 2000)

Answer 5

1) spells approach
- chronic poor identified by number of length of spells

2) components approach
- distinguishes permanent component of household income from its transitory variations and identifies chronic poor as those whose permanent component is below poverty line

Question 6

levels of vulnerability

Answer 6

highly vulnerable
- > 50% probability of being poor in next period

moderately vulnerable
- < 50% probability of being poor in next period

not vulnerable
- no chance of being poor in next period

Question 7

4 categories of determinants

Answer 7

1) household characteristics
- gender, ethnicity, caste

2) asset endowments
- natural, physical, financial, social capital

3) context in which capital is used
- agro-ecological conditions/market access/institutions/common and public goods and policies

4) transfers
- access to social safety nets and remittances

Question 8

4 types of shocks

Answer 8

1) to assets
2) to context in which it uses assets to generate income
3) to context in which it transforms its income and consumption
4) to transfers

Question 9

two types of policy instruments

Answer 9

• cargo-net instruments that can lift average income
• transitory poverty to raise expenditure and reduce exposure to risk

Question 10

advantages of empirical evidence based approach

Answer 10

• provides consistent and common theoretical framework within which we can evaluate policy and institutional reforms
• provides quantification of effects of various measures
• delivers better understanding of microeconomic processes that generate income growth
• kind of evidence currently being built by microeconomic research at national level will be most persuasive and credible advice to policy makers