STEG Working Paper Series Research Theme 0: Data, Measurement, and Conceptual Framing, Research Theme 2: Labour, Home Production, and Structural Transformation at the Level of the Household

Estimating Poverty Mobility in Tanzania: Evidence from Pseudo-Panel Data 1991-2018

WP084_HongoliLeyaro_EstimatingPovertyMobilityinTanzania.pdf

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Lushoto Village Kenya

Using pseudo-panel data from five rounds of the Household Budget Survey (HBS), we estimate poverty dynamics (movement in and out of poverty over time) in Tanzania for more than a quarter-century. The study finding shows that while extreme poverty has declined significantly during this period, basic need poverty has only declined slightly, and remains high in rural areas.  For poverty dynamics, the study finding shows that the percentage of households moving out of poverty has been declining over time. Furthermore, the study findings show a high degree of extreme (food) poverty mobility but a low basic need poverty mobility, where relatively high degree of poverty mobility is observed more for urban than rural areas. In addition, the findings reveal a greater proportion of households moving out of poverty than falling into poverty, however, the percentage of households falling and staying into poverty appears to increase over time, implying a decline in poverty reduction efforts. Our estimates are closer and more consistent with other recent estimates on poverty mobility and vulnerability in a couple of sub-Saharan African countries, including earlier studies in Tanzania. Our study adds to empirical literature that attempts to estimate poverty dynamics over a long period. More importantly, the study compares poverty dynamics over a long period by exploiting various cross-sectional surveys from 1991 to 2018 (over a quarter-century). 

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