Structural and stochastic poverty, shocks, and resilience capacity in rural Ethiopia

Figures & data

Figure 1. Integrated measures of poverty (Carter & May, 1999).

Table 1. Temporal distributions

	2011/12	2013/14		Change rate $\mathrm{\Delta }\left(\mathrm{\%}\right)$
			2015/16	A	B	C
Structural poor	425(18.0)	418(17.7)	475(20.1)	−0.3	2.4	2.1
Stochastic poor	597 (25.2)	579(24.5)	604(25.5)	−0.8	1.1	0.3
Stochastic non-poor	492 (20.8)	515(21.8)	572(24.2)	1.0	2.4	3.4
Structural non-poor	853 (36.0)	855(36.1)	716(30.2)	0.1	−5.9	−5.8

Notes: A = 2011/12–2013/14, B = 2013/14–2015/16, and C = 2011/12–2015/16.

Figure 2. Self-reported shocks.

Table 2. Spatial distributions

	Tigray	Amhara	Oromia	SNNP	Others	Total
Structural poor	106(8.05)	373(28.3)	170(12.95)	461(34.9)	208(15.8)	1,318(18.6)
Stochastic poor	154(8.6)	555(31.3)	266(14.9)	541(3.4)	263(14.8)	1,779(25.1)
Stochastic non-poor	215(13.7)	297(18.8)	359(22.8)	361(22.8)	347(21.9)	1,579(22.2)
Structural non-poor	326(13.5)	461(19.0)	545(22.5)	488(2.1)	604(24.9)	2,424(34.1)
Total	801(11.3)	1,686(23.7)	1,340(18.8)	1,851(26.1)	1,422(20.03)	7,100 (100)

Table 3. Transition matrices

Structural
2015/16
2011/12		Poor	Non-poor
	Poor	Twice poor (6.83)	Upward mobile (10.63)
	Non-poor	Downward mobile (18.04)	Twice non-poor (64.49)
	Total	(24.87)	(75.12)
Stochastic
2011/12		Poor	Non-poor
	Poor	Twice poor (4.18)	Upward mobile (13.28)
	Non-poor	Downward mobile (15.16)	Twice non-poor (67.37)
	Total	(19.34)	(80.65)

Figure 3. Poverty trajectories.

Table 4. Descriptive statistics

	Structurally				test statistics	Stochastically				test statistics
	NP (N = 1454)	UM (N = 289)	DM (N = 352)	P (N = 91)		NP (N = 1250)	UM (N = 380)	DM (N = 386)	P (N = 154)
Attributes and capacities
Age	46.37	48.56	46.06	45.04	3.609	46.79	45.78	47.07	45.34	13.04***
Household size	5.045	5.491	5.569	5.651	7.286***	4.936	5.357	5.599	6.092	1.292
Female-headed (Yes = 1)	0.234	0.215	0.257	0.275	2.112	0.264	0.177	0.217	0.195	15.86***
Education (Literate = 1)	0.343	0.297	0.296	0.247	2.722	0.369	0.263	0.286	0.233	10.28**
Resource base
Income (Ethiopian Birr)	9091	6900	7048	6408	502.3***	8939	8614	6843	7086	538.6***
Land (hectare)	0.396	0.536	0.485	0.386	0.150***	0.381	0.611	0.396	0.437	0.100***
Livestock-owned (TLU)	5.089	3.863	5.126	3.707	90.59***	5.047	4.736	4.539	4.651	54.85***
Oxen for plow (#)	0.947	0.843	0.924	0.715	2.810	0.950	0.868	0.840	1.000	41.81***
Farm plots (#)	8.695	8.982	9.448	9.091	11.52***	8.652	8.006	9.340	9.364	2.660
Skilled non-farm workers (#)	0.889	0.794	0.739	0.772	10.58**	0.809	0.903	0.603	0.597	46.17***
Household activities
Commercialization index	13.71	12.80	7.692	9.549	40.62***	9.956	7.014	12.56	9.505	14.03***
Share of non-farm income (%)	0.297	0.264	0.281	0.264	0.639	0.274	0.258	0.284	0.206	1.995
Wage participation (Yes = 1)	0.115	0.101	0.103	0.064	13.31***	0.108	0.092	0.131	0.103	11.43**
Shocks
Drought shock (Yes = 1)	0.151	0.166	0.203	0.179	9.106**	0.111	0.201	0.191	0.148	21.45***
Production shock (Yes = 1)	0.037	0.122	0.133	0.142	51.71***	0.181	0.235	0.245	0.188	11.63***
Price shock (Yes = 1)	0.047	0.125	0.122	0.131	32.25***	0.194	0.237	0.245	0.258	2.516
Other covariate shocks (#)	0.458	0.612	0.650	0.646	2.180	0.576	0.583	0.721	0.621	20.68***
Other idiosyncratic shocks (#)	0.322	0.315	0.377	0.495	13.46***	0.327	0.357	0.338	0.364	2.591
Others
Credit (Yes = 1)	0.234	0.208	0.298	0.174	8.446***	0.212	0.291	0.234	0.320	12.23***
Distance to the market (Km)	66.85	78.40	74.37	90.04	9.738**	66.61	75.46	76.60	74.49	18.00***
Distance to the town (Km)	40.77	40.27	39.91	46.51	31.84***	40.89	39.55	42.74	38.42	33.70***
Irrigation (Yes = 1)	0.151	0.106	0.098	0.036	314.9***	0.157	0.160	0.135	0.120	106.48***

Notes: NP = non poor, UM= upward mobile, DM = downward mobile, and P = poor.

Table 5. Multinomial logit model results

	Structural poor			Stochastic poor			Stochastic non-poor
	Coef.	Std.Err	dy/dx	Coef.	Std.Err	dy/dx	Coef.	Std.Err	dy/dx
Structural non-poor	Base outcome
Resilience capacity	−48.24***	2.307	−4.524***	−40.46***	1.977	−5.323***	−5.52***	1.493	3.236***
Age	−0.007	0.015	0.0002	0.002	0.014	0.002	−0.022*	0.013	−0.004*
Age squared	0.0001	0.0001	0.0001	−0.0001	0.0001	−0.0001	0.0001**	0.0001	0.0001**
Household size	0.426***	0.020	0.039***	0.397***	0.018	0.055***	0.039**	0.018	−0.033***
Female headship	0.367***	0.094	0.034***	−0.040	0.088	−0.045***	0.397***	0.078	0.064***
Number of farm plots	0.553***	0.090	0.014	1.180***	0.079	0.191***	0.236***	0.075	−0.053***
Education	−0.044	0.119	0.002***	−0.344***	0.116	−0.063***	0.102	0.100	0.041***
Extension	−0.245***	0.083	−0.024***	0.035	0.074	0.030**	−0.241***	0.072	−0.038***
Share of non-farm income	−7.306***	1.256	−0.647***	−5.308***	1.097	−0.546***	−2.655***	0.997	0.101
Commercialization	−0.028***	0.003	−0.002***	−0.035***	0.003	−0.005***	−0.006***	0.002	0.002***
Access to irrigation	−0.276***	0.078	−0.027***	−0.138**	0.060	−0.009	−0.104*	0.057	−0.001
Wage labor participation	0.004	0.003	0.001*	0.005**	0.002	0.001***	−0.007***	0.002	−0.002***
Distance to the town	0.006***	0.001	0.001***	0.005***	0.001	0.001***	0.001**	0.001	0.0001**
NDVI	−0.007***	0.001	−0.001***	−0.005***	0.001	−0.001***	0.0001	0.001	0.001***
Covariate shocks	0.931**	0.449	0.062	0.528	0.410	0.002	1.012***	0.336	0.122**
Idiosyncratic shock	0.466	0.676	0.048	0.503	0.587	0.086	−0.177	0.482	−0.081
Production shock	2.397**	1.064	0.285	−0.458	0.888	−0.239***	1.827**	0.780	0.218
Market shock	2.036*	1.147	0.483**	−1.179	0.938	−0.220***	−0.824	0.777	−0.183**
Rainfall variability	0.001	0.002	0.0002	−0.001	0.002	−0.0001	−0.001	0.002	0.0001
Resilience * production shock	−10.51**	4.264	−1.159**	1.435	3.414	1.056*	−6.672**	2.952	−0.934*
Resilience * market shock	−9.37**	4.605	−1.499***	4.500	3.593	0.981*	3.212	2.906	0.683
Resilience * rainfall variability	−0.004	0.010	−0.001	0.004	0.008	0.001	0.002	0.007	0.0001
Resilience * covariate shocks	−3.420*	1.771	−0.218	−2.370	1.569	−0.092	−3.601***	1.265	−0.400*
Resilience * idiosyncratic shocks	−1.672	2.662	0.169	−1.902	2.244	−0.326	0.626	1.782	0.295
Constants	11.35***	0.720	0.001*	9.07***	0.634	0.001***	1.975***	0.537	−0.002***
Observations	7100

LR chi2 (72) = 2490.9, prob> chi2 = 0.0000, pseudo R2 = 0.1289, and log likelihood = −8415.3.

Notes: *, **, *** 1%, 5%, and 10% respectively.

Table 6. Cox proportional hazard model estimates

	Structural entry		Structural exit		Stochastic entry		Stochastic exit
	Coef.	Std. Err.	Coef.	Std. Err.	Coef.	Std. Err.	Coef.	Std. Err.
Resilience capacity	−4.789***	0.625	2.477***	0.446	−3.294***	0.577	2.081***	0.487
Lag resilience capacity	−2.479***	0.587	1.622***	0.396	−1.860***	0.551	1.523***	0.414
Rainfall variability	0.006***	0.002	−0.005*	0.003	0.007***	0.002	−0.008***	0.003
Drought	0.000**	0.000	0.000	0.000	0.000**	0.000	0.000	0.000
Flooding	0.064***	0.019	−0.011	0.018	0.036*	0.018	−0.090**	0.044
Conflict	0.001	0.001	−0.085**	0.035	0.115***	0.036	0.013	0.029
Price shock	−0.075	0.063	0.017	0.028	−0.011	0.042	−0.184***	0.012
Idiosyncratic shocks	0.028	0.029	−0.069**	0.034	0.030	0.028	−0.340***	0.038
NDVI	−0.672***	0.055	−0.048	0.042	−0.565***	0.051	0.010	0.018
Age of household head	0.000	0.001	0.000	0.001	0.000	0.001	0.001	0.001
Household size	0.015	0.013	−0.180***	0.011	0.000	0.012	0.009***	0.001
Female household head	0.003**	0.001	−0.001	0.001	0.004***	0.001	−0.133***	0.036
Education	−0.095**	0.044	0.009***	0.001	0.000	0.001	0.045	0.058
Share of non-farm income	−0.138***	0.037	0.119**	0.053	0.020	0.057	−0.001	0.001
Irrigation	−0.123***	0.039	0.093**	0.041	−0.076**	0.035	0.032	0.043
Observations	7,082		7,082		7,082		7,082

Notes: *, **, *** 1%, 5%, and 10% respectively.

Table 7. Dimensions and indicators used to estimate resilience

Dimensions	Indicators	References
Access to basic services	Access to clean water Access to improved toilet Access to electricity	Exogenous responses provided by the public play a key role in determining the risk exposure of households.
Assets	Land Tropical livestock unit Number of rooms	Assets are part of household wealth, and their availability serves as an important risk coping mechanism. They enhance the resilience capacity of the household to be free from poverty even in the face of shocks and stresses.
Adaptive capacity	Numbers of income sources Subsistence households Food ratio	Households’ capacity to cope with and adapt to certain shocks, so enables households to keep performing their key functions.
Social safety nets	Participation in PSNP Remittances	They comprise formal and informal access to public and private, cash or in-kind transfers to households from different sources that make up a substantial portion of poor households’ annual income.

Carter, M. R., & May, J. (1999). Poverty, livelihood and class in rural South Africa. World Development, 27(1), 1–20. https://doi.org/10.1016/S0305-750X(98)00129-6

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