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Welfare dynamics in rural Kenya and Madagascar

Author

Listed:
  • Christopher Barrett
  • Paswel Phiri Marenya
  • John Mcpeak
  • Bart Minten
  • Festus Murithi
  • Willis Oluoch-Kosura
  • Frank Place
  • Jean Claude Randrianarisoa
  • Jhon Rasambainarivo
  • Justine Wangila
Abstract
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.

Suggested Citation

  • Christopher Barrett & Paswel Phiri Marenya & John Mcpeak & Bart Minten & Festus Murithi & Willis Oluoch-Kosura & Frank Place & Jean Claude Randrianarisoa & Jhon Rasambainarivo & Justine Wangila, 2006. "Welfare dynamics in rural Kenya and Madagascar," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 248-277.
    • Handle: RePEc:taf:jdevst:v:42:y:2006:i:2:p:248-277
    DOI: 10.1080/00220380500405394
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    References listed on IDEAS

    as
    1. Kristjanson, Patricia & Krishna, Anirudh & Radeny, Maren & Nindo, W., 2004. "Pathways out of Poverty in Western Kenya and the Role of Livestock," PPLPI Working Papers 23779, Food and Agriculture Organization of the United Nations, Pro-Poor Livestock Policy Initiative.
    2. Bob Baulch & John Hoddinott, 2000. "Economic mobility and poverty dynamics in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 1-24.
    3. Gamba, Paul & Mghenyi, Elliot, 2004. "Rural Poverty Dynamics, Agricultural Productivity and Access to Resources," Working Papers 202622, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
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