lynx   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/fao/wpaper/0212.html
   My bibliography  Save this paper

Pathways Towards Prosperity in Rural Nicaragua: Why households drop in and out of poverty, and some policy suggestions on how to keep them out

Author

Listed:
  • Benjamin Davis

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

  • Marco Stampini
Abstract
While Nicaragua over the past decade has ranked among the poorest countries in Latin America in terms of per capita GDP, data from the last three LSMS surveys (1993, 1998, and 2001) has shown a consistent, though modest, decline in the incidence of poverty. Nationally, the incidence of poverty among individuals has fallen from 50.3 to 45.8 percent over this period. Most poverty is concentrated in the rural sector (with an incidence of 67.8 percent) and in particular in the Central region (75 percent) (World Bank, 2002a). Given the dynamism of agriculture over the last decade, it is somewhat surprising that the reduction of rural poverty has not been greater. Further, this apparent slow, but stable decline in overall poverty incidence masks active movement at the household level in and out of poverty, particularly in the rural sector. At the household level it is much more difficult to find and explain an overall march towards increased living standards. In this paper we analyze the dynamic of poor households moving in and out of poverty, using panel data from the 1998 and 2001 LSMS surveys. The availability of panel data offers an opportunity to analyze who and how households escaped or fell into poverty. What were the principal exit strategies used by households? What are the major determinants of exiting poverty and remaining in poverty? How do poor rural households achieve prosperity? While we touch on both the rural and urban poor, we concentrate primarily on rural households, given their much larger numbers and greater heterogeneity. We apply a variety of methodologies in our analysis of poverty exit strategies. In Section II we provide some background information on the rural sector in Nicaragua, and in Section III we analyze changes in asset ownership and use as well as poverty status. We analyze who has left and entered poverty and provide a description of their characteristics. Given insufficient data points to separate chronic and transient poverty by econometric means, we will instead characterize these different groups of households in descriptive terms. In Section III we briefly describe the situation of agriculture, agricultural assets, and agrarian institutions, the basis of the rural economy in Nicaragua. Next, in Section IV we use econometric methods to find the determinants of changes in welfare over the panel period as measured by consumption and income. In the conclusions in Section V, we will bring these three types of analysis together and build a matrix of poverty exit paths combined with policy recommendations for specific categories of rural households. Full results can be found in Appendices II, while a detailed discussion of panel data issues, most importantly that of attrition, can be found in Appendix I.

Suggested Citation

  • Benjamin Davis & Marco Stampini, 2002. "Pathways Towards Prosperity in Rural Nicaragua: Why households drop in and out of poverty, and some policy suggestions on how to keep them out," Working Papers 02-12, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    • Handle: RePEc:fao:wpaper:0212
    as

    Download full text from publisher

    File URL: ftp://ftp.fao.org/docrep/fao/007/ae031e/ae031e00.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. J. Edward Taylor & Antonio Yunez-Naude, 2000. "The Returns from Schooling in a Diversified Rural Economy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 287-297.
    2. Barrett, Christopher B. & Reardon, Thomas, 2000. "Asset, Activity, And Income Diversification Among African Agriculturalists: Some Practical Issues," Working Papers 14734, Cornell University, Department of Applied Economics and Management.
    3. Winters, Paul & Davis, Benjamin & Corral, Leonardo, 2002. "Assets, activities and income generation in rural Mexico: factoring in social and public capital," Agricultural Economics, Blackwell, vol. 27(2), pages 139-156, August.
    4. Hausman, Jerry A & Wise, David A, 1979. "Attrition Bias in Experimental and Panel Data: The Gary Income Maintenance Experiment," Econometrica, Econometric Society, vol. 47(2), pages 455-473, March.
    5. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    6. Alderman, Harold & Behrman, Jere R. & Kohler, Hans-Peter & Maluccio, John A. & Cotts Watkins, Susan, 2000. "Attrition in longitudinal household survey data - some tests for three developing-country samples," Policy Research Working Paper Series 2447, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kostas Stamoulis & Alberto Zezza, 2003. "A Conceptual Framework for National Agricultural, Rural Development, and Food Security Strategies and Policies," Working Papers 03-17, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    2. David Lawson & Andy Mckay & John Okidi, 2006. "Poverty persistence and transitions in Uganda: A combined qualitative and quantitative analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 42(7), pages 1225-1251.
    3. World Bank, 2005. "Shocks and Social Protection : Lessons from the Central American Coffee Crisis, Volume 1, Synthesis of Findings and Implications for Policy," World Bank Publications - Reports 8435, The World Bank Group.
    4. Bruno, Randolph Luca & Stampini, Marco, 2007. "Joining Panel Data with Cross-Sections for Efficiency Gains: An Application to a Consumption Equation for Nicaragua," IZA Discussion Papers 3231, Institute of Labor Economics (IZA).
    5. Vakis, Renos & Kruger, Diana & Mason, Andrew D., 2004. "Shocks and coffee : lessons from Nicaragua," Social Protection Discussion Papers and Notes 30164, The World Bank.
    6. Gong, Tengda, 2022. "Economic Impacts of Land Security Improvements: Investment Incentives versus Rental Incentives," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322094, Agricultural and Applied Economics Association.
    7. Benjamin Davis & Paul Winters & Gero Carletto & Katia Covarrubias & Esteban Quinones & Alberto Zezza & Kostas Stamoulis & Genny Bonomi & Stefania DiGiuseppe, 2007. "Rural Income Generating Activities; A Cross Country Comparison," Working Papers 07-16, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    8. Castañeda Navarrete, Jennifer, 2013. "Poverty Dynamics in Mexico, 2002-2005. An Ethnicity Approach," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 33(1), September.
    9. Gero Carletto & Katia Covarrubias & Benjamin Davis & Marika Krausova & Kostas Stamoulis & Paul Winters & Alberto Zezza, 2007. "Rural income generating activities in developing countries: re-assessing the evidence," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 4(1), pages 146-193.
    10. John Maluccio, 2010. "The Impact of Conditional Cash Transfers on Consumption and Investment in Nicaragua," Journal of Development Studies, Taylor & Francis Journals, vol. 46(1), pages 14-38.
    11. Stampini, Marco & Davis, Benjamin, 2003. "Discerning transient from chronic poverty in Nicaragua: measurement with a two period panel data set," ESA Working Papers 289096, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    12. Ufer, Danielle & Ortega, David L., 2022. "Right on the Money? U.S. Farmers Have a Varied Understanding of Consumer Preferences and Attitudes over Animal Welfare and Biotechnology," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322269, Agricultural and Applied Economics Association.
    13. Jakobsen, Kristian Thor, 2012. "In the Eye of the Storm—The Welfare Impacts of a Hurricane," World Development, Elsevier, vol. 40(12), pages 2578-2589.
    14. World Bank, 2004. "Drivers of Sustainable Rural Growth and Poverty Reduction in Central America : Nicaragua Case Study, Volume 1. Executive Summary and Main Text," World Bank Publications - Reports 14554, The World Bank Group.
    15. Benjamin Davis & Paul Winters & Gero Carletto & Katia Covarrubias & Esteban Quinones & Alberto Zezza & Kostas Stamoulis & Genny Bonomi & Stefania DiGiuseppe, 2008. "Rural Income Generating Activities : A Cross Country Comparison," World Bank Publications - Reports 9198, The World Bank Group.
    16. World Bank, 2004. "Drivers of Sustainable Rural Growth and Poverty Reduction in Central America : Nicaragua Case Study, Volume 2. Background Papers and Technical Appendices," World Bank Publications - Reports 14557, The World Bank Group.
    17. Banda, Diana J. & Hamukwala, Priscilla & Haggblade, Steven & Chapoto, Antony, 2011. "Dynamic Pathways into and out of Poverty: A Case of Small Holder Farmers in Zambia," Food Security Collaborative Working Papers 113649, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    18. Andrew Papworth & Mark Maslin & Samuel Randalls, 2022. "The challenges of a food sovereignty perspective: an analysis of the foodways of the Rama indigenous group, Nicaragua," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(4), pages 1013-1026, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Conal Winters & Vera Chiodi, 2011. "Human Capital Investment And Long‐Term Poverty Reduction In Rural Mexico," Journal of International Development, John Wiley & Sons, Ltd., vol. 23(4), pages 515-538, May.
    2. Francesca Marchetta, 2008. "Migration and non farm activities as income diversification strategies: the case of Northern Ghana," Working Papers - Economics wp2008_16.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    3. Verbeek, M.J.C.M. & Nijman, T.E., 1992. "Incomplete panels and selection bias : A survey," Discussion Paper 1992-7, Tilburg University, Center for Economic Research.
    4. Keisuke Hirano & Guido W. Imbens & Geert Ridder & Donald B. Rubin, 2001. "Combining Panel Data Sets with Attrition and Refreshment Samples," Econometrica, Econometric Society, vol. 69(6), pages 1645-1659, November.
    5. Michael Fertig & Stefanie Schurer, 2007. "Earnings Assimilation of Immigrants in Germany: The Importance of Heterogeneity and Attrition Bias," SOEPpapers on Multidisciplinary Panel Data Research 30, DIW Berlin, The German Socio-Economic Panel (SOEP).
    6. Evans, Lawrance & Schwartz, Jeremy, 2014. "The effect of concentration and regulation on audit fees: An application of panel data techniques," Journal of Empirical Finance, Elsevier, vol. 27(C), pages 130-144.
    7. ter Horst, Jenke R. & Nijman, Theo E. & Verbeek, Marno, 2001. "Eliminating look-ahead bias in evaluating persistence in mutual fund performance," Journal of Empirical Finance, Elsevier, vol. 8(4), pages 345-373, September.
    8. Winters, Paul & Davis, Benjamin & Corral, Leonardo, 2002. "Assets, activities and income generation in rural Mexico: factoring in social and public capital," Agricultural Economics, Blackwell, vol. 27(2), pages 139-156, August.
    9. John Fitzgerald & Peter Gottschalk & Robert Moffitt, 1998. "An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of Income Dynamics," Journal of Human Resources, University of Wisconsin Press, vol. 33(2), pages 251-299.
    10. Glenn W. Harrison & Morten I. Lau & Hong Il Yoo, 2020. "Risk Attitudes, Sample Selection, and Attrition in a Longitudinal Field Experiment," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 552-568, July.
    11. Hernandez, Ricardo & Berdegue, Julio A. & Reardon, Thomas, 2012. "Modern Markets and Guava Farmers in Mexico," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 127649, International Association of Agricultural Economists.
    12. Yamana Kazufumi, 2020. "Monte Carlo Evidence on the Estimation Method for Industry Dynamics," Journal of Econometric Methods, De Gruyter, vol. 9(1), pages 1-12, January.
    13. Simon Calmar Andersen & Louise Beuchert & Phillip Heiler & Helena Skyt Nielsen, 2023. "A Guide to Impact Evaluation under Sample Selection and Missing Data: Teacher's Aides and Adolescent Mental Health," Papers 2308.04963, arXiv.org.
    14. Joachim Inkmann, 2010. "Estimating Firm Size Elasticities of Product and Process R&D," Economica, London School of Economics and Political Science, vol. 77(306), pages 384-402, April.
    15. Lorenzo Cappellari & Stephen P. Jenkins, 2004. "Modelling Low Pay Transition Probabilities, Accounting for Panel Attrition, Non-Response, and Initial Conditions," CESifo Working Paper Series 1232, CESifo.
    16. Astrid Grasdal, 2001. "The performance of sample selection estimators to control for attrition bias," Health Economics, John Wiley & Sons, Ltd., vol. 10(5), pages 385-398, July.
    17. Verbeek, Marno & Nijman, Theo, 1992. "Testing for Selectivity Bias in Panel Data Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 681-703, August.
    18. Nijman, T.E. & Verbeek, M.J.C.M., 1993. "Nonresponse in panel data : The impact on estimates of a life cycle consumption function," Other publications TiSEM 7e304903-485c-4f36-b13a-f, Tilburg University, School of Economics and Management.
    19. Benjamin Davis & Paul Winters & Gero Carletto & Katia Covarrubias & Esteban Quinones & Alberto Zezza & Kostas Stamoulis & Genny Bonomi & Stefania DiGiuseppe, 2008. "Rural Income Generating Activities : A Cross Country Comparison," World Bank Publications - Reports 9198, The World Bank Group.
    20. Inkmann, J., 2005. "Inverse Probability Weighted Generalised Empirical Likelihood Estimators : Firm Size and R&D Revisited," Other publications TiSEM c39cff1f-16c1-4446-a83f-c, Tilburg University, School of Economics and Management.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fao:wpaper:0212. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gustavo Anríquez The email address of this maintainer does not seem to be valid anymore. Please ask Gustavo Anríquez to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/faoooit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.
    Лучший частный хостинг