Nonlinear Dynamics of Livestock Assets: Evidence from Ethiopia

36 Pages Posted: 9 Jan 2013

See all articles by Bjorn Van Campenhout

Bjorn Van Campenhout

International Food Policy Research Institute (IFPRI); KU Leuven - Centre for Institutions and Economic Performance (LICOS)

Stefan Dercon

University of Oxford - Department of Economics

Date Written: October 1, 2012

Abstract

Recent research on the intertemporal dynamics of poverty using microeconomic data often hints at the existence of poverty traps, where some find themselves trapped at a low-level stable equilibrium while others enjoy a higher stable equilibrium. Without a sizable positive shock to well-being, those trapped at the low equilibrium will not automatically outgrow destitution, but merely fluctuate around that low-level equilibrium. Given the dramatic policy consequences implied by such a theory, knowledge about the location of the different equilibria would be extremely helpful. In this paper, we explore the possibilities of threshold-type models to identify those crucial parameters. We illustrate the method by searching for traps in the dynamics of livestock asset holdings in rural Ethiopia. We find evidence of distribution-dependent dynamics and multiple equilibria for tropical livestock units.

Keywords: poverty traps, livestock assets, multiple equilibria

Suggested Citation

Van Campenhout, Bjorn and Dercon, Stefan, Nonlinear Dynamics of Livestock Assets: Evidence from Ethiopia (October 1, 2012). IFPRI Discussion Paper 01215, Available at SSRN: https://ssrn.com/abstract=2198474 or http://dx.doi.org/10.2139/ssrn.2198474

Bjorn Van Campenhout (Contact Author)

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

KU Leuven - Centre for Institutions and Economic Performance (LICOS) ( email )

Waaistraat 6 - box 3511
Leuven, 3000
Belgium

Stefan Dercon

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom
44 1865 271084 (Phone)
44 1865 271094 (Fax)

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