Transient Poverty in Rural China

44 Pages Posted: 20 Apr 2016

See all articles by Martin Ravallion

Martin Ravallion

Georgetown University

Jyotsna Jalan

Indian Statistical Institute

Date Written: June 1996

Abstract

The authors study transient poverty in a six-year panel dataset for a sample of 5,000 households in post-reform rural China. Half of the mean squared poverty gap is transient, in that it is directly attributable to fluctuations in consumption over time. There is enough transient poverty to treble the cost of eliminating chronic poverty when targeting solely according to current consumption - and to title the balance in favor of untargeted transfers. Transient poverty is low among the chronically poorest, and tends to be high among those near the poverty line. Using censored quantile regression techniques, the authors find that systemic factors determine transient poverty, although they are generally congruent with the determinants of chronic poverty. There is little to suggest that the two types of poverty are created by fundamentally different processes. It appears that the same things that would help reduce chronic poverty - higher and more secure farm yield and higher levels of physical and human capital - would also help reduce transient poverty.

Suggested Citation

Ravallion, Martin and Jalan, Jyotsna, Transient Poverty in Rural China (June 1996). Available at SSRN: https://ssrn.com/abstract=636123

Martin Ravallion (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

Jyotsna Jalan

Indian Statistical Institute ( email )

7 S.J.S. Sansanwal Marg
Planning Unit
New Delhi - 110016
India

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