The Economics of Poverty Traps and Persistent Poverty: An Asset-Based Approach

Journal of Development Studies, Forthcoming

Posted: 6 May 2005 Last revised: 23 May 2011

See all articles by Michael R. Carter

Michael R. Carter

University of Wisconsin - Madison - Department of Agricultural & Applied Economics

Christopher B. Barrett

Cornell University - Charles H. Dyson School of Applied Economics & Management

Date Written: January 1, 2005

Abstract

Longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty. While a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty, this paper develops an asset-based approach to poverty analysis that makes it possible to distinguish deep-rooted, persistent structural poverty from poverty that passes naturally with time due to systemic growth processes. Drawing on the economic theory of poverty traps and bifurcated accumulation strategies, this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term, persistent structural poverty. We also propose an extension of the Foster-Greer Thorbecke class of poverty measures to provide a natural measure of long-term welfare status. The paper closes with reflections on how asset-based poverty can be used to underwrite the design of persistent poverty reduction strategies.

Suggested Citation

Carter, Michael R. and Barrett, Christopher B., The Economics of Poverty Traps and Persistent Poverty: An Asset-Based Approach (January 1, 2005). Journal of Development Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=716162

Michael R. Carter

University of Wisconsin - Madison - Department of Agricultural & Applied Economics ( email )

427 Lorch St.
Madison, WI 53706-1503
United States
608-263-2478 (Phone)

Christopher B. Barrett (Contact Author)

Cornell University - Charles H. Dyson School of Applied Economics & Management ( email )

315 Warren Hall
Ithaca, NY 14853-7801
United States
607-255-4489 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://aem.cornell.edu/faculty_sites/cbb2/

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