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Vulnerability as Expected Poverty in Rural India

Raghbendra Jha (), Woojin Kang, Hari Nagarajan () and Kailash Pradhan ()

ASARC Working Papers from The Australian National University, Australia South Asia Research Centre

Abstract: Using a unique panel data for rural India for the periods 1999 and 2006 this paper models vulnerability to poverty. We quantify household vulnerability in rural India in 1999 and 2006, investigate the determinants of ex post poverty as well as ex ante vulnerability, assess the role of ex ante vulnerability on poverty shift during the sample periods (i.e. movement into/out of poverty) and finally, examine how the effects of the determinants of vulnerability vary at different points across the vulnerability distribution. We conclude that over time economic growth has reduced the incidence of poverty. Although chronic poverty is relatively small the high incidence of transient poverty underscores the importance of covariate and idiosyncratic shocks. Household vulnerability across the distribution of such vulnerability is also investigated. A number of factors affect such vulnerability across this distribution. Thus the paper isolates a number of characteristics of households and policy variables which can be targeted to reduce the incidence of vulnerability in rural India.

Keywords: Vulnerability; Poverty; Covariate and Idiosyncratic shocks; REDS data; India (search for similar items in EconPapers)
JEL-codes: C23 C25 C31 I32 (search for similar items in EconPapers)
Pages: 24
Date: 2012
New Economics Papers: this item is included in nep-dev
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