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Is Poverty Stochastic or Structural in Nature? Evidence from Rural India

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Abstract

The rationale of this study is to bring in a new area of poverty measurement based on household’s access to basic assets from across Indian States. The major drawback of the average income based measure of poverty is that it is unable to distinguish between the structural and stochastic nature of poverty. This paper applies the asset based framework to poverty to distinguish the relationship between structural and stochastic poverty. The paper has used data from the India Human Development Survey 2005. The results indicate the importance of asset formation for long term poverty reduction. There is a need for targeting pointed policies towards the identified structural poor and stochastic non-poor as they are the most vulnerable and need asset building.

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Notes

  1. This is the only official poverty line of Indian States is available to us.

  2. Here state indicates Indian state.

  3. However we do not have the valuation of the assets or livestock, therefore the quality of the assets may not be reflected properly.

  4. Study has used appropriate household survey weights for estimating poverty.

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Correspondence to Swati Dutta.

Appendix

Appendix

See Tables 4 and 5.

Table 4 Descriptive statistics of main variables
Table 5 Descriptive statistics on asset index

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Dutta, S., Kumar, L. Is Poverty Stochastic or Structural in Nature? Evidence from Rural India. Soc Indic Res 128, 957–979 (2016). https://doi.org/10.1007/s11205-015-1064-9

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