|  |
|
Pathways into and out of Poverty: A Study of Rural Household Wealth Dynamics in Kenya
Author(s): Milu Muyanga, T.S. Jayne, and William J. Burke
Introduction
For the past half-century, African governments and development agencies have
experimented with a series of alternative approaches for addressing rural poverty, each giving
way to a new paradigm as the persistence of poverty created disillusionment with prevailing
approaches.1 In 2005, more than 40 percent of sub-Saharan Africa’s population was estimated to
be below the poverty line, and this situation appears to have improved only marginally over the
past decade (World Bank, 2006). Despite successive years of five percent growth in real gross
domestic product (GDP) in sub-Saharan Africa in 2004, 2005, 2006, and 2007, rural poverty
appears to be declining only marginally, and is even increasing in some countries.
Yet some smallholder farm households have successfully climbed out of poverty, and
providing an opportunity to learn about the economic pathways that might enable other rural
smallholders to do so. If researchers and policy makers knew more about the factors enabling
some households to have risen out of poverty, it might be possible to replicate these factors more
broadly through poverty reduction strategies. Conversely, some households that were once well
above the poverty line have now descended into poverty. Such cases may also provide insights
about the design of programs and policies to address rural poverty. Additional insights may be
possible by identifying “successful” farmers who have consistently outperformed others in their
communities and the reasons for it. This study is motivated by the need to better understand the
factors enabling rural households in sub-Saharan Africa to escape from poverty and remain nonpoor,
as well as those that may push relatively wealthy households into poverty.
This study examines the factors associated with dramatic changes in farm household asset
wealth over a 10-year period in Kenya. The study makes use of household panel survey data
collected in 1997, 2000, 2004 and 2007 to identify three types of smallholder farm households:
(i) those experiencing a major improvement in asset wealth; (ii) those experiencing a major
decline in wealth leading to living standards below the poverty line; and (iii) “successful”
smallholder farmers consistently in the top quartile of asset wealth throughout the 10-year
period. Seventy-eight households were revisited in 2008 to conduct retrospective in-depth “life
history” surveys. The sample was confined to smallholder farming households controlling less
than 4 hectares of land, given than 95 percent of Kenya’ smallholder population is also in this
situation. The study thus omits cases of poverty reduction arising from obtaining access to significant new land, a situation that is infeasible for the vast majority of rural African
households.
The study measures poverty and wealth in terms of households’ assets. While most
studies to date have tended to measure household welfare in terms of income or consumption,
arguments have been raised in support of households’ value of assets as a more appropriate
measure of welfare. Asset holdings are considered to be a more stable indicator of current
welfare and future vulnerability especially in regions where households rely greatly on their
physical assets for their livelihoods (Krishna, 2004; Barrett and Swallow, 2006; Carter and
Barrett, 2006; Cooper, 2008). In environments where credit and insurance markets are not
available, households have been found to rely on their assets to smooth consumption and to
ensure survival through repeated shocks. Thus, assets act as a ‘safety-net’ when households’
income streams are interrupted (Carter and Barrett, 2006 and Zeller and Sharma, 2000). For
these reasons, the study of household asset dynamics -- how households build up their asset base
and why asset bases get depleted -- is likely to be important in developing effective poverty
reduction strategies.
The study is organized as follows: Section 2 examines poverty trends in Kenya over the
past 20 years based on official government statistics. Section 3 describes the data and sampling
methods used in this study. Section 4 reviews the literature on the determinants of poverty in
rural Africa based on prior studies and reports descriptive trends and factors correlated with asset
wealth and poverty patterns in the nationwide panel sample. Section 5 presents the estimation
strategy used to derive statistical inferences about the importance of these various factors
associated with changes in poverty status over time. Section 6 reports the main findings, while
Section 7 discusses the implications for the rural investments, programs, and policies designed to
reduce rural poverty.
Open/Download Document
 Pathways into and out of Poverty: A Study of Rural Household Wealth Dynamics in Kenya - Pdf
|
|
