Measuring Vulnerability and Poverty: Estimates for Rural India

This paper measures the vulnerability of households in rural India, based upon the ICRISAT panel survey. We employ both ex ante and ex post measures of vulnerability. The latter are decomposed into aggregate and idiosyncratic risks and poverty components. Our decomposition shows that idiosyncratic risks account for the largest share, followed by poverty and aggregate risks. Despite some degree of risk-sharing, the landless or small farmers are vulnerable to idiosyncratic risks, forcing them to reduce consumption. Income augmenting policies therefore must be combined with those that not only reduce aggregate and idiosyncratic risks but also build resilience against them.aggregate risks, idiosyncratic risks, poverty, vulnerability, semi-arid conditions

Vulnerability, Shocks and Persistence of Poverty - Estimates for Semi-Arid Rural South India

This paper focuses on vulnerability of rural households to poverty when a negative crop shock occurs based on the ICRISAT panel data in India during 1975-84. Of particular concern is the possibility of some sections experiencing long spells of poverty as a consequence of such shocks. Using alternative specifications that take into account both direct and indirect effects of crop shocks, an assessment of vulnerability of different groups (e.g. caste affiliations) of households and policy simulations on land and non-land asset transfers are carried out. A reorientation of anti-poverty strategy is necessary to avoid welfare losses from the crop shocks.shocks, dynamics, vulnerability, transfers, poverty

Is there a case for the employment guarantee scheme in India? Some recent evidence

Overall participation in the Employment Guarantee Scheme (EGS) in Maharashtra (an Indian state) fell sharply over the period 1980-97. Some of this reduction was due to expansion of irrigation facilities leading to expansion of farm employment. Alongside, expansion of non-farm employment led to a further reduction in the demand for the EGS. Although there was a slight rise in participation in subsequent years, it was dampened by a change in the composition of the EGS. Specifically, substitution of community assets (e.g. soil conservation works) by individual assets (e.g. wells) involved fewer workers. The official explanation for the decline in EGS participation in recent years in terms of expansion of farm and non-farm employment opportunities is thus partly valid. In some of the poorer regions (e.g. tribal villages), however, the EGS continues to confer significant transfer and stabilisation benefits during long seasonal slacks. As alternative employment options are few and far between, the dependence on the EGS is unavoidably high for those who are able to participate in it. If the overall participation rates are low, it is partly a consequence of the nature of projects undertaken and low outlays and not so much a result of slackening of demand for the EGS. A case therefore is made for enhanced outlays under the EGS with a substantially higher reallocation in favour of the poorest regions

Commentary on ‘Does Research Reduce Poverty? Assessing the Impacts of Policy?oriented Research in Agriculture’

While entitlement protection is intrinsically a short?term task, building flexible and effective response mechanisms is a long?term one. So a more comprehensive research agenda is needed – especially in the context of countries/regions characterised by low and varying yields and with limited opportunities for trade with the rest of the world. A case is, therefore, made for prioritisation of agricultural research, a pivotal role for the private sector and expansion of technology. Institutions matter a great deal, as ownership and access rights to natural resources (land, water) can have a significant impact on incentives to adopt sustainable agricultural options

Undernutrition, poverty and growth in rural India - a regional analysis

We discuss characteristics of the spatial distribution of poverty and calorie and protein deficiency in India. Two units of analysis are considered states and NSS-defined agro-climatic zones. The data used are the NSS Expenditure Surveys of the 43rd, 50th and 55th rounds. Results on stochastic dominance as per these criteria are also reported

The Role of Public Trust in People\u27s Subjective Well-Being

Kenneth Arrow, perhaps the most influential economist after John Maynard Keynes in the 20th century, viewed trust as a lubricant that fosters cooperative behaviour and thus facilitates mutually advantageous economic exchanges in the presence of incomplete contracts and imperfect information. Recent research has confirmed the beneficial effects of trust in government on economic performance. The obverse, that an erosion of trust in public institutions (state, judiciary and police) has deleterious effects on economic performance, is equally true. Various recent accounts do not just corroborate an erosion of trust in governance, but also point to the imperative of strengthening it to break out of the deep recession that India’s economy is in. The fiscal stimulus has been too little, too late

Calorie deprivation and poverty nutrition trap in rural India

This paper tests for the existence of a Poverty Nutrition Trap (PNT) in the case of the nutrient most likely to have productivity impacts, i.e., calories, for three categories of wages – sowing, harvesting, and other – and for male and female workers separately. We use household level national data for rural India for the period January to June 1994. We use robust sample selection procedures due to Tobit methods and due to Heckman to arrive at consistent estimates. It is discovered that the PNT exists for women workers engaged in harvesting and sowing in the case of the Heckman methodology. In the case of the Tobit analysis a PNT exists in the case of female harvest, male other, and female other categories of wages

Does the employment guarantee scheme stabilise household incomes in rural India?

Our analysis, based on the ICRISAT panel survey of villages in the semi-arid region of south India, confirms the income stabilizing effect of the Employment Guarantee Scheme in India. Variability of household income is measured by an unconditional variance of residuals of an income equation. A (variant) of Heckman's sample selection model is employed to allow for the endogeneity of EGS participation and to assess its income stabilizing role. The (instrumented) EGS participation reduces the residual variance of household income, implying consequent income stabilization

Poverty nutrition trap in rural India

The contribution of the present paper is threefold. First, we formally test whether the effect of calorie deprivation on wages is more significant/higher for the lower quantiles of workers. In the extant literature this is established through non-linear terms in the wage equation. A more satisfactory method of doing this is through quantile regressions. Second, the quantile regression approach helps us identify the exact group for which the poverty-nutrition trap holds. The extant literature is unable to establish whether there are systematic differences across different quintiles in the response of productivity/wages to nutrition. The present paper addresses this lacuna. Third, we are able to establish a critical wage level for which the PNT trap hypothesis holds. For wages higher than this the hypothesis does not hold. We then argue that this value of the wage rate should set a floor for any minimum wage for agricultural labourers