rural income dynamics and poverty reduction in thai villages from 1987 to 2004 this article aims to examine the factors contributing to the increase in household income and the corresponding reduction in poverty in rural thai villages from 1987 to 2004 by employing household panel data it is found that there has been a significant structural shift of household income away from farm to nonfarm income sources as well as a reduction in the income gap and the difference in poverty incidence between favorable and unfavorable regions such decreases in poverty and its regional gap have been associated with the declining importance of income accrued to farm land measured by farm size and the availability of irrigation and with the increasing importance of human capital measured by the proportion of working members who have graduated from post lower secondary schools such findings indicate that the success in rural poverty reduction in thailand has resulted from the development of the rural nonfarm sector coupled with the improvement of the schooling levels of the rural population

income dynamics in tamil nadu india from 1971 to 2003 changing roles of land and human capital this article examines the changing role of physical and human capital in income dynamics in tamil nadu india using detailed daily records of farming households from 1971 to 2003 we find that income growth until the early 1990s is attributed to the rice green revolution and the associated development of nonrice farm sector further growth after the 1990s became possible due to the rapid nonfarm sector development that has been stimulated by the liberalization of indian economy since 1991 in accordance with this change in income structure the importance of physical and human capital has changed human capital was important in the early 1970s to take advantage of the rice green revolution technology once the new technology became standard among farmers human capital became an insignificant factor the importance of human capital has revived in a different manner in recent years firstly because it has increased farmers access to nonfarm job opportunities and secondly because farm management has become more knowledge intensive in the face of increasing scarcity of labor and water the contribution of physical capital increased during the green revolution period while it started declining after that the changing mechanism is characterized as the shifting importance from physical to human capital in accordance with the changing engines of income growth from the green revolution to the development of nonfarm sector

ex ante and ex post labor supply response to risk in a low income area abstract this paper tests for ex ante and ex post labor supply responses to weather risk for rural indian farm households the analysis uses panel data on 2115 households spanning 13 states in rural india merged with a 22 year series of district level rainfall data ex ante households facing riskier distributions of rainfall are more likely to participate in the labor market ex post unexpectedly bad weather and low rainfall increase labor force participation

exchange rate rules and macroeconomic stability this paper discusses exchange rate rules in their role as macroeconomic instruments we abstract throughout from the trend part of exchange rate behaviour a crawling peg necessitated by differences in trend inflation and emphasise instead the implications of exchange rate rules in providing flexibility of real wages or in affecting the stability of output or prices

wealth as a criterion for sustainable development in this article the authors define sustainable development as an economic programme along which social well being does not decline over time it can be shown that the requirement is equivalent to the maintenance of a comprehensive measure of wealth where an economy s wealth is defined to be the social worth of its entire array of capital assets including natural capital using data published by the world bank on the world s poorest regions countries which would be regarded as having performed well if judged on the basis of such indices as gnp per head or the human development index are found to have grown poorer a few alarmingly so

exports inflation and growth abstract this article seeks to identify some of the main determinants of exports and economic growth in cross sectional data from the world bank covering 160 countries for 1985 94 first the linkages between the propensity to export and population per capita income agriculture primary exports and inflation are studied by statistical methods then the relationship between economic growth and some of the above mentioned determinants of exports as well as investment are scrutinized the same way the main conclusion is that in the period under review high inflation and an abundance of natural resources tended to be associated with low exports and slow growth

welfare dynamics in rural kenya and madagascar this paper presents comparative qualitative and quantitative evidence from rural kenya and madagascar in an attempt to untangle the causality behind persistent poverty we find striking differences in welfare dynamics depending on whether one uses total income including stochastic terms and inevitable measurement error or the predictable structural component of income based on a household s asset holdings our results suggest the existence of multiple dynamic asset and structural income equilibria consistent with the poverty traps hypothesis furthermore we find supporting evidence of locally increasing returns to assets and of risk management behaviour consistent with poor households defence of a critical asset threshold through asset smoothing

using evidence of household income diversification to inform study of the rural nonfarm labor market in africa abstract the labor market literature in developing countries has seldom drawn on the studies of rural household income diversification this paper draws on such studies to inform future study of the rural nonfarm labor market in africa the review of evidence provides some surprising departures from traditional images of nonfarm activities of rural households among the most striking is the dominant importance in the majority of case study areas of nonfarm wage labor as compared to self employment of nonfarm sector earnings as compared to farm sector wage earnings and of local nonfarm earnings as compared to migration earnings the most worrying finding was the poor distribution of nonfarm earnings in rural areas despite the importance of these earnings to food security and farm investments this poor distribution implies significant entry barriers and market segmentation it is probable that this will lead over time to an increasingly skewed distribution of land and other assets in rural africa

determinants of income mobility and household poverty dynamics in south africa this article analyses household income mobility among africans in south africa s most populous province kwazulu natal between 1993 and 1998 compared to industrialised and most developing countries mobility has been quite high as might have been expected after the transition in south africa this finding is robust when measurement error is controlled for when disaggregating the sources of mobility it is found that demographic changes and employment changes account for most of the mobility observed which is related to rapidly shifting household boundaries and a very volatile labour market in an environment of high unemployment using a multivariate analysis it can be seen that transitory incomes play a large role four types of poverty traps are found associated with large initial household size poor initial education poor initial asset endowment and poor initial employment access that dominate the otherwise observed regression towards the mean

rural income and poverty in a time of radical change in malawi abstract malawi is one of the poorest countries in africa there is widespread though not universal agreement about the shape of poverty in the country and the policy challenge this sets agriculture continues to be the most obvious means to stimulate broad based rural growth and to provide levels of food security and income needed for the majority rural population a longitudinal study over a decade during which radical policy and political changes occurred provides the data and basis for discussing the appropriate policy directions for reducing poverty

are schooling and roads complementary evidence from income dynamics in rural indonesia summary we examine the impact of spatial connectivity on household income growth and non agriculture labor supply in indonesia by combining household panel data and village census data during the period of 1995 2007 our empirical results show that the impacts of improved local road quality on income growth and the transition to non agricultural labor markets depend on household education and distance to economic centers in particular post primary education significantly increases the benefit from the improvement of local spatial connectivity in remote areas promoting labor transition to non agricultural sectors education and local road quality are complementary mutually increasing non agricultural labor supply and income in remote areas in contrast the initial landholding size does not affect the benefit from improved road quality

real and nominal shocks in a two country price setting world abstract this paper develops a two country model in which the law of one price does not hold in the short run and which is consistent with the stylized fact that exchange rates respond more quickly to news than prices this is done by assuming that firms face lumpy information costs in determining what price to charge both domestic and imported goods prices are therefore sticky with respect to news and deviations from the law of one price ppp are due to exchange rate surprises the model is used to analyze the domestic and international impact of real and nominal disturbances

on the intergenerational allocation of natural resources it is known hartwick and others that under standard assumptions a society that invests in reproducible capital the competitive rents on its current extraction of exhaustible resources will enjoy a consumption stream constant in time it is shown here that this result can be interpreted as saying that an appropriately defined stock of capital including the initial endowment of resources is being maintained intact and that consumption can be interpreted as the interest on that patrimony this seems like a useful rule of thumb for policy

rural livelihood diversification in sub saharan africa a literature review abstractthis article provides a comprehensive review of the literature on the nature and evolution of rural livelihood diversification in sub saharan africa and the situation regarding smallholders it reveals mixed findings about the causes and consequences of livelihood diversification on rural smallholders adopting this strategy a lot of evidence from the literature suggests that it is relatively better off smallholders with sufficient assets who achieve successful livelihood diversification mainly by exploiting opportunities and synergies between farm and nonfarm activities because of asset constraints increase in incomes and wealth based on livelihood diversification has not yet benefitted the large majority of smallholders

few opportunities much desperation the dichotomy of non agricultural activities and inequality in western kenya summary using data from western kenya we confirm the existence of a dichotomous non agricultural sector the poverty and inequality implications of the differently motivated diversification strategies only partly correspond to expected patterns while high return activities are indeed confined to richer households low return activities constitute an important income source for households across the entire income distribution finally we examine the wider implications of our findings for rural livelihoods we find that only engagement in high return non agricultural activities is significantly associated with increased agricultural productivity it seems that such high return activities play a key role in triggering cumulative effects of relative livelihood success

does the nonfarm economy offer pathways for upward mobility evidence from a panel data study in ethiopia summary empirical studies across many developing countries routinely document a positive correlation between participation in rural nonfarm employment and households wealth or income this paper explores whether nonfarm employment leads to higher consumption expenditure growth in ethiopia we find that 1 households consumption expenditure growth is positively correlated with the initial share of nonfarm income 2 the growth elasticity of nonfarm income share is higher for wealthier households and 3 the main source of growth for nonfarm participants comes from the higher rates of return participants enjoy on their human and physical capital

available capital utilized capital and shadow prices in inclusive wealth accounting abstract previously accounting for comprehensive or inclusive wealth has focused on the supply side of capital assets however human well being created by capital assets inherently depends on the demand side as well in particular if capital is not utilized at its full capacity then realized or actual human well being may be less affected by available capital than by effective or utilized capital in principle this notion is embodied in a shadow price which is defined as the marginal contribution of capital assets to social well being the shadow price becomes higher if the underlying resource allocation mechanism improves in practice one can account for such underutilization by adjusting shadow prices to reflect only the utilized quantity of the capital in question furthermore capital utilization has different nuanced implications for produced human and natural capital and its implications even vary across some classes of natural capital within this line of theoretical thought we provide empirical estimates of the changes in inclusive wealth and sustainability of selected developing countries in recent years by comparing available and utilized capital assets we find that sustainability assessments may be revised based on utilized capital due to among others human capital underemployment and non renewable natural capital accessibility

national accounts and environmental resources in the paper optimal growth theory is used to derive the appropriate definition of the net national product concept when there are environmental resources and environmental damage to take into account the basic conclusions are that conventional defined np should be corrected by deducting environmental damage and adding the value of the net change of all resources

capital theory and the measurement of sustainable development an indicator of weak sustainability the measurement of sustainable development is not without considerable difficulties yet this should not detract from the positive advances that can be made in this direction in this paper we present one form that a weak sustainability indicator can take derived from a simple but intuitive savings rule it incorporates the idea that the level of overall capital stock should be non decreasing although subject to qualification at this stage some interesting results emerge from the application of the rule to 18 countries

the rural non farm sector issues and evidence from developing countries abstract the rural non farm sector has traditionally been viewed as a low productivity sector which produces low quality goods it is often expected to wither away as a country develops recent years have seen a shift away from this position towards recognition that the rural non farm sector can and often does contribute to economic growth rural employment poverty reduction and a more spatially balanced population distribution this paper reviews the literature on the conceptual and empirical underpinnings of this more recent perspective focussing on the experience in developing countries the paper documents the size and heterogeneity of the sector pointing to evidence that in many countries the sector is expanding rather than declining the issues associated with measuring the sector s economic contribution are discussed followed by empirical assessments for several countries and regions the distributional impact of non farm earnings is examined and it is found that a pro poor impact while by no means inevitable can be considerable the sector s trajectory over time in different settings is reviewed and the scope for and experience of various policy interventions is discussed

land inheritance and market transactions in uganda studies on the role of nonmarket land transactions remain limited this paper addresses two questions is land inheritance driven by underdeveloped land markets how does land inheritance influence land disposal and acquisition we use a switching regression model on household data from rural uganda we find that the initially landless or near landless households due to little or no land inheritance obtain land through land markets while those that are land rich dispose of land through land sales and bequests the results suggest that a process of land equalization is unfolding within the sample

introduction to the special issue on the role of nonfarm income in poverty reduction evidence from asia and east africa in this special issue we present seven studies that collectively attempt to investigate the role of non farm income in long term and short term poverty reduction in asia and africa the first four studies out of the seven use long term panel data over two decades in the philippines thailand bangladesh and india these studies show drastic increases in non farm income shares and corresponding declines in poverty levels over time especially in the philippines and thailand education levels of household members and returns to education also increased significantly in these countries the remaining three studies use cross sectional and short term panel data from ethiopia kenya and uganda these african studies show high proportions of poor households and low shares of non farm income that are somewhat comparable to the situation in the 1980s described in the asian studies without the green revolution that provided stable farm income and potential financial resources to invest in children education in asia it is not clear if african farm households can follow the asian examples

evaluating projects and assessing sustainable development in imperfect economies we are interested in three related questions 1 how should accounting prices be estimated 2 how should we evaluate policy change in an imperfect economy 3 how can we check whether intergenerational well being will be sustained along a projected economic programme we do not presume that the economy is convex nor do we assume that the government optimizes on behalf of its citizens we show that the same set of accounting prices should be used both for policy evaluation and for assessing whether or not intergenerational welfare along a given economic path will be sustained we also show that a comprehensive measure of wealth computed in terms of the accounting prices can be used as an index for problems 2 and 3 above the remainder of the paper is concerned with rules for estimating the accounting prices of several specific environmental natural resources transacted in a few well known economic institutions

exploring poverty traps and social exclusion in south africa using qualitative and quantitative data abstract recent theoretical work hypothesises that a polarised society like south africa will suffer a legacy of ineffective social capital and blocked pathways of upward mobility that leaves large numbers of people trapped in poverty to explore these ideas this paper employs a mix of quantitative and qualitative methods novel econometric analysis of asset dynamics over the 1993 98 period identifies a dynamic asset poverty threshold that signals that large numbers of south africans are indeed trapped without a pathway out of poverty qualitative analysis of this period and the period 1998 2001 more deeply examines patterns of mobility and confirms the continuation of this pattern of limited upward mobility and a low level poverty trap in addition the qualitative data permit a closer look at the specific role played by social relationships while finding ample evidence of active social capital and networks these are more helpful for non poor households for the poor social capital at best helps sta

global value chains large scale farming and poverty long term effects in senegal this paper presents panel data evidence on the impact of expansion of global value chains and large scale export oriented farms in developing countries over almost a decade we estimate the income effects of wage employment on large scale farms in the horticultural export sector in senegal using data from two survey rounds covering a seven years period of rapid expansion of the sector we estimate average income effects as well as heterogeneous income effects using fixed effects and quantile fixed effects regressions we find that poverty and inequality reduced much faster in the research area than elsewhere in senegal employment in the horticultural export sector is associated with higher household income and the income effect is strongest for the poorest households expansion of the horticultural export sector in senegal has been particularly pro poor through creating employment that is accessible and creates substantial income gains for the poorest half of the rural population these pro poor employment effects contrast with insights in the literature on increased inequality from rural wage employment

smoothing consumption by smoothing income hours of work responses to idiosyncratic agricultural shocks in rural india while research has demonstrated that farm households in developing economies are able to protect consumption from idiosyncratic crop shocks little evidence shows how this is achieved this paper examines the extent to which labor markets allow households to shift labor from farm to off farm employment and the extent to which such a shift explains the observed lack of correlation between consumption and idiosyncratic crop shocks the empirical analysis uses a novel measure of the idiosyncratic crop income shock which utilizes information on start of season cropping choices to more accurately estimate household expectations of weather

the determinants of nonfarm income diversification in rural peru abstract this paper shows that in peruvian rural areas there has been substantial growth over the past decade in household employment outside of own farming at present 51 of the net income of rural households comes from these off farm activities and thus they certainly cannot be considered as marginal the reasons households diversify their incomes are several access to public assets such as roads and private assets such as education and credit is an important factor in diversification increasing access to these assets will help rural households to increase their self employment as well as wage employment in the nonfarm sector

supermarkets and agricultural labor demand in kenya a gendered perspective abstract many developing countries are experiencing a rapid expansion of supermarkets new supermarket procurement systems could affect farming patterns and wider rural development while previous studies have analyzed farm productivity and income effects possible employment effects have received much less attention special supermarket requirements may entail intensified farm production and post harvest handling thus potentially increasing demand for hired labor this could also have important gender implications because female and male workers are often hired for distinct farm operations building on data from a recent survey of vegetable farmers in kenya a double hurdle model of hired labor use is developed and estimated farmer participation in supermarket channels increases the likelihood of hiring labor by 20 and demand for hired labor by 61 a gender disaggregation shows that positive employment effects are especially pronounced for female laborers who often belong to the most vulnerable population groups rural employment generation can be an important vehicle for poverty reduction

wealth natural capital and sustainable development contrasting examples from botswana and namibia theoretical work has demonstrated that sustainable development requires non declining per capita wealth where wealth is defined to include produced natural human and social capital several studies have attempted to measure total national wealth or changes in wealth but have been seriously hampered by a lack of data especially for natural and human capital to address this problem the un and other international statistical agencies developed a standardized framework for environmental accounts the system of integrated environmental and economic accounts seea using the newly available asset accounts for natural capital national wealth accounts are constructed and used to assess the contrasting development paths of botswana and namibia botswana with an explicit policy of reinvestment of resource rents has roughly tripled per capita wealth and national income over the past two decades namibia with no explicit policy to use natural capita to build wealth has seen per capita wealth and income decline

persistent poverty in north east ghana abstract this paper explores local poverty and wealth inequality in the upper east region of northern ghana in the period from 1975 89 land was not scarce and the social management of household membership and household labour were critical to household security but this social management was not independent of wealth status there was a virtuous circle between wealth and household labour supply and a vicious circle between poverty and small household size poverty traps existed so that those with too little labour and too little wealth engaged in strategies which entrenched them in poverty

nonfarm employment agricultural shocks and poverty dynamics evidence from rural uganda this article examines the role of off farm employment in poverty reduction over a short period of time by using panel data from 894 rural ugandan households in 2003 and 2005 taking advantage of the unique off farm labor supply and income data we analyzed how households respond to negative agricultural shocks especially through off farm labor supply and income to mitigate crop income loss our analysis indicates that the flexibility of labor time allocation varies across off farm jobs and that only low skilled and low wage jobs tend to be used to mitigate negative shocks especially among the asset poor

vulnerability seasonality and poverty in ethiopia most studies examining the dynamics of welfare have found large fluctuations in consumption over relatively short periods suggesting substantial short run movements in and out of poverty the consequence is that cross section poverty research may not be able to identify the poor in this study we explore this short run variability further we use a data set on a panel of 1450 households in different communities in rural ethiopia surveyed thrice over 18 months on average year to year poverty is very similar however we find high variability in consumption and poverty over the seasons and year by year econometric analysis suggests that consumption is affected by idiosyncratic and common shocks including rainfall and household specific crop failure while households respond to seasonal incentives related to changing labour demand and prices the results imply that a larger number of households are vulnerable to shocks than implied by the standard poverty statistics while some of the non poor in the

export pricing flexible exchange rates and divergence in the prices of traded goods abstract a model of firm pricing where customers adjust slowly to price differences is extended to an exporting firm under flexible exchange rates the foreign currency price the firm sets determines both current net revenue and the rate of investment in market share real exchange rate changes lead to price revisions but the protracted adjustment of customers prompts a smaller price response to transitory changes in the real exchange rate the model accounts for observed variations in traded goods prices across countries and the failure of exporting firms to pass through exchange rate changes but in contrast to static models does not predict frequent reallocation of traded goods production

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

non farm activity household expenditure and poverty reduction in rural vietnam 2002 2008 summary diversifying into non farm activities has been suggested as an effective way out of poverty for rural households in developing countries using the vietnamese household living standards surveys of 2002 2004 2006 and 2008 we test this claim and investigate the effect of non farm sector involvement on poverty and expenditure growth our endogeneity corrected estimates show that an additional household member involved with non farm activity reduces the probability of poverty by 7 12 and increases the household expenditure by 14 over a two year period our findings also indicate that non farm involvement reduces the hours worked on farm but not the household agricultural income

money shocks and deviations from purchasing power parity abstract this paper applies the island economy framework of phelps 1970 to a small open economy under a flexible exchange rate to study the effects of nominal and real disturbances on the purchasing power parity relation incomplete information about the aggregate state of the economy and informational differences between agents implies that a monetary shock that has finite variance can induce deviations from purchasing power parity while also affecting production consumption and the current account the real effects of money however become smaller as the variance of money gets larger a type of lucas slope effect of money on deviations from purchasing power parity is obtained

choices and the value of natural capital sustainability requires maintaining opportunities for future generations so they can meet their needs opportunities are passed to future generations through a set of capital assets nature provides an important class of these assets but markets seldom reveal the marginal value of natural capital rather the marginal social worth or asset price must be imputed based on intertemporal exchange in the context of assessing whether intertemporal allocation rules lead to sustainable development appropriate asset prices must be based on the actual allocations and trade offs society makes therefore measuring economic programmes that enable the measurement of asset prices is an important empirical task we review the theory of measuring natural capital asset prices and discuss the key elements of measuring economic programmes that enable the measurement of natural capital asset prices we place the measurement of economic programmes and natural capital asset prices in the context of wealth based sustainability metrics