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Annex 4
Household panel data – capturing poverty dynamics and determinants
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Figure 1 presents the data on rural poverty dynamics in visual form. It shows the following:
(a) First, there is a great deal of movement across national poverty lines in rural areas across countries. This
reflects mobility in and out of poverty. Other work on poverty dynamics shows that household expenditure
is close to national poverty lines for a large number of rural households, which may explain frequent
movement across these lines.
(b) Second, chronic poverty incidence varies considerably between countries, although this is a reflection, at
least in part, of different national poverty lines. Based on their national poverty lines, chronic poverty is very
high in the two urbanizing countries of the set: Nicaragua and South Africa. In Ethiopia, Uganda and the
United Republic of Tanzania (the most agriculture-based countries of the set), the proportion of chronic poor
is relatively lower, with trajectories in and out of poverty being instead relatively frequent. Again, however,
cross-country comparability is weak given the different value of national poverty lines.
(c) Third, a great deal of mobility out of poverty was recorded in countries that did well in terms of growth and
development during the period between the two survey years, such as Uganda and Viet Nam. A large
proportion of rural households clearly benefited from growth in these contexts.
(d) The frequency of downward mobility is ‘significant’ to ‘very high’ across the board, highlighting both the
widespread vulnerability of rural people to factors that may cause them to fall (back) into poverty and the fact
that macroeconomic growth is not enough in itself to prevent rural people from falling into poverty.
Poverty dynamics and rural household characteristics
The three models below present the results of the statistical models used to test the association of poverty
dynamics with the different factors described in table 1.