Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 260: Poverty dynamics in Ethiopia: state dependence
Nizamul Islam () and Abebe Shimeles ()
Additional contact information
Nizamul Islam: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Abebe Shimeles: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Abstract: This paper focuses on the persistency of poverty in rural and urban households in Ethiopia by estimating dynamic probit models. Unobserved heterogeneity, first order state dependence and serially correlated error component are allowed for. The empirical results for both rural and urban areas show that each of these components is statistically significant in characterising the dynamics of poverty in Ethiopia. Furthermore, risk of poverty increases with the number of household’s size. Moreover, land size is highly correlated (negatively) with that risk of poverty and the most important two cash crops (Coffee and Chat) has significant role in the alleviation of poverty in Ethiopia. Finally, the effect of true state dependence and transitory shocks in poverty persistency appears to be stronger among urban households than rural households.
Keywords: Poverty persistency; State dependence; Unobserved heterogeneity
JEL-codes: J22
26 pages, August 29, 2007
Full text files
4730 HTML file
Questions (including download problems) about the papers in this series should be directed to Jessica Oscarsson ()
Report other problems with accessing this service to Sune Karlsson ().
RePEc:hhs:gunwpe:0260This page generated on 2024-11-14 18:33:26.