The effect of the initial land endowments on Transient and Chronic
Poverty: Evidence from Rural Mozambique
Raul Pitoro
Michigan State University
[email protected]
Introduction
• Poverty is well documented in Mozambique, but
few studies have systematically made distinction
between chronic and transitory poverty or estimate
their determinants.
• The distinction between transitory and chronic
poverty is of great interest for policy makers as it
provide insights in what development strategies to
pursue based on the prevalent type of poverty
• Two important aspect in poverty study is whether
there policies will have similar effect on addressing
chronic and transitory poverty or whether the
determinants of chronic differ from those of
transitory poverty and that the determinants of
chronic and transient poverty are congruent.
• To answer those questions, one needs to
decompose poverty into chronic and transient
components which possess an important
methodological challenge in poverty analysis.
• This study aims to investigate the effects of the
initial landholdings endowments on the ability of
people to tackle chronic and transient poverty.
More specifically, two research questions are
addressed:
• What is the effect of the initial landholdings
endowments on transient and chronic
poverty?
• Are the determinants of chronic and
transient poverty congruent?
Data derived from two-period three-year panel survey
conducted in rural central and northern regions of
Mozambique, covering five provinces (Manica, Tete,
Sofala, Nampula, and Zambezia) in 2008 and 2011.
•
The sample size was originally 1,186 households, but
due to outliers and extraneous values in some of
variables of interest, 14 households were dropped from
the sample.
•
The estimation strategy consists in two main steps:
•
First: Decomposition of total poverty into chronic and
transient poverty based on Jalan & Ravalion (1998), such
that:
T
•Chronic poverty:
PitC  t 1  (1  y,i ) 
•Transient poverty:
PiT  Pit  PitC
t 1
•
where yi is the intertemporal income average, known as
“permanent income”
•
Second: Two empirical models were estimated with censored
quantile regression:
Pi
C
PiT
•
C *if C *  0, where C *  xi C   iC
 Ci  
0 otherwise
Tr *if Tr *  0, where Tr *  xi Tr   iTr
 Tri  
0 otherwise
(Chronic )
(Transient )
where C*/Tr* are latent variables and Ci /Tri are the
observed chronic/transient poverty, β a vector of
estimable parameters and xi a set of explanatory
variables including land, and εi are the model error terms.
Acknowledgements:
Research supported by the
Food Security Group at
Michigan State University
under the Mozambique Food
• The majority of poverty is transient. The decomposition shows that 66 percent of
poverty is transient and 34 percent in chronic.
• Unlike most of earlier studies, the determinants of chronic and transient poverty
are not congruent; and policies to address chronic poverty are not necessarily
the same to tackle the transient poverty.
• The most important variables for transient poverty are remoteness, head’s age,
family, fertilizer use, and livestock. All these variables are important even when
the cultivated land is considered exogenous, except the remoteness and
livestock that become insignificant. All these covariates tend to decrease the
transient poverty, except the remoteness which is likely to decrease it.
• The most important variables for the chronic poverty are the cultivated land
size, access to self-employment, use of fertilizer, improved seeds and hiring
seasonal labor. But, when the cultivated land size is considered endogenous,
only male headship, head’s education and civil status of the head (widowed
heads) are important for chronic poverty. All these variables tend to decrease
chronic poverty except the widowed heads which tend to increase it.
• Results show that doubling the initial cultivated land size is likely to decrease
chronic poverty in about 0.39 percent under the current poverty lines. This level
is lower under higher poverty lines. This result is consistent with Jalan &
Ravalion (1998) that households with large cultivated land are less vulnerable to
chronic poverty.
Materials and methods
•
Results
Security III LWA Cooperative
Agreement and a Cooperative
Agreement between MSU and
the USDA Foreign Agricultural
Service.
• The adoption of improved agricultural technologies has the potential to tackle
both chronic and transient poverty. Results show the adoption of chemical
fertilizers decreases chances to be chronically and transitorily poor by 59 and
49 percent; respectively.
Conclusions
• The determinants of chronic and transient
poverty are not congruent, suggesting that
the chronic and transient have different
causes. Therefore, different interventions
should be deployed to target each type of
poverty. However, multiple effects are
expected from interventions aiming to
promote agricultural growth and labor
market.
• Although the majority of poverty is transient,
fighting chronic should be a priority given the
fact that chronic poverty because as argued
by Garza-Rodriguez et al. (2010), more
unfair the chronic poverty is more unfair and
damaging than transient poverty, because a
chronically poor person have been in such
state for long period of time which can lead
Literature cited
Jalan, J. & Ravallion, M. (1998). Determinant of Transient and Chronic
Poverty. Evidence from Rural China. World Bank. Policy Research
Working Paper Series No. 1936. Washington DC.
to a damaging social fabric of the society
which may lead to political instability.
• So, long-term interventions such as
education and self-employment are
recommended to tackle chronic poverty due
to the fact that an educated person can
easily aspire to have higher income over the
course of their lifetime. On the other hand,
with promotion of rural non-farm economy,
households with large size of family labor,
are likely to take advantage of large number
of people that can contribute to household
income helping the households to cope with
external shocks leading to transient poverty.
• The determinants of chronic poverty are very
sensitive to the exogeneity assumption of
cultivated land.
Garza-Rodriguez, J., Gonzalez-Martinez, M., Quiroga-Lozano, M., SolisSantoyo, L. & Yarto-Weber, G. (2010). Chronic and transient poverty in
Mexico: 2002-2005. Economic Bulletin 30(4): 3188-3200.