The Nature and Dynamics of Poverty
26 Pages Posted: 20 Apr 2016
Date Written: May 16, 2002
Fofack investigates the determinants and dynamics of poverty during the five-year growth period that followed the 1994 CFA franc devaluation in Burkina Faso. Results show that the nature and dynamics of poverty determinants are influenced by the spatial location of households and that the post-devaluation growth period did not significantly alter the pattern of poverty determinants. The most significant determinants of poverty over the growth period include the burden of age dependency, human and physical assets, household amenities, and spatial location. Though consistently significant at the national level, the direction of association between these determinants and welfare depends on their nature. While the burden of age dependency is consistently negatively associated with welfare, asset ownership is positively associated. The probability of being poor declines with increasing share of household assets and increases with the burden of age dependency. There are some variations at the regional level, however, shown by the difference in the scope of significance of these determinants. While the ratio of age dependency remains the most significant determinant of rural poverty, its explanatory power decreases considerably in urban areas where its marginal effect on the probability of being poor is relatively low over the two reference periods, despite the significance of the probit coefficient and the relatively low asymptotic standard error.
This paper - a product of Macroeconomics 3, Africa Technical Families - is part of a larger effort in the region to better understand the determinants of growth and poverty in Sub-Saharan Africa.
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