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Determinants of Rural Transient and Chronic Poverty: Evidence from Kenya. Milu Muyanga, Miltone Ayieko and Mary Kwamboka Tegemeo Institute of Agricultural Policy and Development Egerton University (Kenya) P.O Box 20498, 0200 Nairobi Tel +254 20 2717818/2717876 Email: muyanga@tegemeo.org.
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Determinants of Rural Transient and Chronic Poverty:Evidence from Kenya Milu Muyanga, Miltone Ayieko and Mary Kwamboka Tegemeo Institute of Agricultural Policy and Development Egerton University (Kenya) P.O Box 20498, 0200 Nairobi Tel +254 20 2717818/2717876 Email: muyanga@tegemeo.org Presentation at the Poverty and Economic Policy (PEP) Research Network General Meeting June 19-22 2006, Addis Ababa, Ethiopia
Contents • Background • Objectives • Methods and data • Rationale • Results • Policy implications
Background • Poverty, disease and ignorance were identified as major problems at independence • Policy been geared towards addressing these challenges • Country’s economic performance has been low • High poverty incidences have been witnessed • ¾ poor live in the rural areas • Pockets of high poverty in some regions with poverty below the national average
Background (2) • Non-income indicators worsened • High illiteracy rates • Life expectancy declined • Infant and child mortality worsened • Stunted children increased • Vaccination levels low • Gender disparities have persisted
Background (3) • Government Response • National Poverty Eradication Plan (NPEP) • Poverty Reduction Strategy Paper (PRSP) • Consultative • Medium Term Expenditure Framework (MTEF) • Economic Recovery Strategy for Wealth Employment Creation (ERSWEC) • United Nations endorsed Millennium Development Goals (MDGs)
Objectives • Examine rural poverty dynamics • Decompose household total poverty into chronic and transient poverty components • Establish correlates to chronic, transient and total poverty • Draw policy lessons
Rationale • High poverty incidences have created a desire for empirical studies • Most earlier studies of poverty have been static in nature • Determinants of chronic poverty are likely to be different from those of transient poverty • So are the appropriate respective policy responses
Methods and Data • Poverty dynamics: economic transition matrices • Examine movements across poverty lines • Poverty decomposition • Jalan and Ravallion approach • Equally Distributed Equivalent (EDE) poverty gaps approach • Corrected for statistical biases • Determinants of poverty components correlates • Regress total, chronic and transient poverty on a set of a common household characteristics • Use censored quantile regression model • Data: Tegemeo/MSU panel data (1997, 2000 and 2004) • Income is welfare measure • Deflated • Equivalence scales used
Table 3: Chronic and transient poverty by agro regional zones
Policy implications • There has been significant movements in and out of poverty • Chronic poverty dominates transient poverty • Targeting • Large households • Headed by females • Regions • High dependency ratio • Policy variables • Education • Diversification of income and crops grown • Physical assets stock • Cultivated land acreage