Author Name	Jayaraman, Anuja
Email Address	axj902@yahoo.com
Graduate Program	Agricultural Economics and Demography
Degree	Doctor of Philosophy
Document Type	Dissertation
Date of Defense	2006-05-05
Committee	Prof. Jill. L. Findeis, Committee Chair Prof. Carolyn E. Sachs, Committee Member Prof. Gretchen T. Cornwell, Committee Member Prof. Bee-Yan Roberts, Committee Member Prof. Stephen M. Smith, Committee Member
Availability	Open Access
Title	Poverty Dynamics And Household Response: Disaster Shocks In Rural Bangladesh
Abstract	South Asia has the largest concentration of the world’s poor, with over half a billion people surviving on less than a dollar a day. One of the Millennium Development Goals (MDG) aims to halve the proportion of the world’s people whose income is less than one dollar a day and the proportion of people who suffer from hunger by the year 2015. The success of poverty alleviation programs in South Asia is critical if this MDG is to be met. Within South Asia, Bangladesh has the highest incidence of poverty and only India and China have larger numbers of poor people. It is estimated that nearly half of Bangladesh’s population of 135 million people live below the poverty line. The Human Poverty Index reported by the Human Development Report places Bangladesh at the 86th position among 103 developing countries. Apart from high poverty levels and low gender empowerment rates, the country also faces yearly natural disasters in the form of floods. In this dissertation, we first analyze issues relating to chronic and transient poverty following a major catastrophic event using a short panel of household data from Bangladesh. Bangladesh experienced the largest floods of the century in 1998. Increase in private borrowing was one of the medium-term impacts of the floods. The International Food Policy Research Institute’s Food Management and Research Support Project (IFPRI-FMRSP) household survey of rural Bangladesh for the years 1998-99 is used for the analysis. The dissertation attempts to identify the characteristics that distinguish between those who are able to eventually escape poverty following the flood (the transient poor) versus those unable to leave poverty (chronic poor). The study uses cost-of-basic-needs (CBN) poverty lines calculated by the World Bank for Bangladesh for the year 2000. We use multinomial logit models to asses the determinants of chronic and transient poverty, comparing them to Bangladeshi households that were never poor. We also use Censored Quantile Regression models to identify the correlates of each kind of poverty. We find that household size, dependency ratio, number of working members, land ownership, location, social assistance and education characterize the chronically poor. Ownership of physical and human capital make households less likely to be chronically poor. Larger household size and dependents in the household push families towards chronic poverty. Increase in number of working members in the family bring in more income and reduce the chances of households being chronically poor. Given that Bangladesh is an agrarian society and faces yearly floods, it is not surprising that households with heads employed in the trade and self-employment sectors are less likely to be chronically poor compared to those in the agricultural sector. Long term investments in human and physical assets clearly help households out of chronic poverty. Apart from household size, dependency ratio, number of working members, and land ownership, the transient poor are characterized by their access to credit. Credit access and remittances explain transient poverty better. Our models are not able to characterize the transient poor as well as the chronically poor. After having studied the poor and their characteristics, we seek to study how individuals interact and operate within a family or household. We asses intra-household dynamics (e.g., variations in household bargaining behaviors) with a focus on the household’s expenditure patterns. Receipt of credit is taken as the measure of bargaining between the head and the spouse. Food and non-food share equations were individually estimated using random effect OLS and Tobit models to test if participation in credit markets influences food and non-food expenditure shares. Endogeneity corrections were incorporated whenever tests indicated an endogenous relationship between total household consumption and a particular expenditure share. 2SLS models and simultaneous Tobit models were used to correct for endogeneity between the expenditure shares and total expenditure. Our results indicate that more men compared to women participate in the credit market. As is typical of any rural-developing economy, household expenditure share is highest for food. Amount borrowed by the household head has effects on food expenditure, adult goods and education expenditure. Amount of credit taken by the household head negatively affects food expenditure and positively affects share spent on adult goods. The negative effect on food expenditure has policy implications related to nutritional intake of children in the household. Women and girls in the household may also suffer from resultant nutritional deficiencies. Women’s use of credit has a positive impact on expenditure on children’s goods, durable goods, education and housing. Results show that resources in the hands of women have implications for improvement in child outcomes, especially educational outcomes. The positive and significant impact of spouse’s credit on housing share indicates that resources in the hands of women also go towards improvement in household and related outcomes. We also find that households are more likely to spend in round 2 and round 3 than in round 1 on food, education and personal care and more likely to spend on adult goods, children’s goods, durable goods, fuel, health and housing in round 1 than in round 2 or 3.
Keywords	Bangladesh Poverty Intrahousehold dynamics credit
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