Pathways into and out of Poverty: A Study of Rural Household Wealth Dynamics in Kenya

Abstract

This study identifies the factors associated with smallholder farm households that have risen out of poverty or descended into poverty between 1997 and 2007 in Kenya. The study uses data from a nationwide balanced panel of 1,275 households and data from detailed retrospective ‘life history’ survey of 84 households that had experienced either an appreciable improvement or decline in their asset wealth over the 10-year panel period. The results indicate that household welfare dynamics are associated with a disparate set of idiosyncratic and unexpected shocks, such as death and chronic illness, demographic factors, proximity to infrastructural facilities, as well as intergenerational wealth transfers.

Acknowledgements

This report has been prepared under the Guiding Investments in Sustainable Agricultural Markets in Africa (GISAMA), a grant from the Bill and Melinda Gates Foundation to Michigan State University's Department of Agricultural, Food, and Resource Economics. The authors also acknowledge the long-term support that United States Agency for International Development (USAID) Kenya has provided to the Tegemeo Institute of Egerton University for the collection of panel survey data over the 10-year period on which this study draws. They also with to thank Mary Bundi and Christine Kiria of the Tegemeo Institute for their assistance in the retrospective in-depth life history surveys data collection.