Heterogeneous Wealth Dynamics: On the Roles of Risk and Ability

Paulo Santos and Christopher Barrett

No 22626, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies the causal mechanisms behind persistent poverty. Using original data on Boran pastoralists of southern Ethiopia, we find that heterogeneous and nonlinear wealth dynamics arise purely in adverse states of nature. In favorable states, expected herd grow is quasi-linear and universal. We further show that those with lower herding ability, as reflected in past herd growth data, converge to a unique equilibrium at a small herd size while those with higher ability exhibit multiple stable dynamic wealth equilibria.

JEL-codes: O1 O12 Q12 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-agr and nep-sog
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Citations: View citations in EconPapers (7)

Published as Heterogeneous Wealth Dynamics: On the Roles of Risk and Ability , Paulo Santos, Christopher B. Barrett. in The Economics of Poverty Traps , Barrett, Carter, and Chavas. 2019

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Related works:
Chapter: Heterogeneous Wealth Dynamics: On the Roles of Risk and Ability (2017)
Working Paper: Heterogeneous wealth dynamics: On the roles of risk and ability (2016)
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