@article{Muyanga:103377,
      recid = {103377},
      author = {Muyanga, Milu and Jayne, Thomas S. and Burke, William J.},
      title = {Pathways into and out of Poverty:  A Study of Household  Wealth Dynamics in Rural Kenya},
      address = {2011},
      number = {321-2016-10994},
      pages = {2},
      year = {2011},
      abstract = {For the past half-century, African governments and  development agencies have experimented with a series of  alternative approaches for addressing rural poverty, each  giving way to a new paradigm as the persistence of poverty  created disillusionment with prevailing approaches. These  broad strategies included ‘growth and trickle down’ in the  1960s; basic human needs and state-led integrated rural  development in the 1970s; structural adjustment and  economic liberalization in the 1980s and 1990s; and, since  2000, a heterodox mix of donor budget support to empower  government ownership in the design of participatory poverty  reduction strategies, and resurgent interest in  agricultural development. However, rural poverty in most of  Sub-Saharan Africa appears to be declining only marginally.  Yet some smallholder farm households have successfully  climbed out of poverty, thus providing an opportunity to  learn about the economic pathways that might enable other  rural smallholders to do so. Conversely, some households  that were once non-poor have now descended into poverty. If  researchers and policy makers knew more about the factors  associated with these dynamics, it might be possible to  replicate these factors more broadly through poverty  reduction strategies. 
The recent availability of  longitudinal survey data provides a new means to analyze  the dynamics of household asset accumulation and  decumulation. This paper identifies the factors associated  with smallholder farm households having ascended out of  poverty or descended into poverty. Using a nationwide  balanced panel of 1,256 farm households in 22 districts in  Kenya interviewed in 1997, 2000, 2004 and 2007, we find  that a relatively small fraction of the sample experienced  either an appreciable improvement or decline in their  relative asset wealth over this 10-year period. Over 70  percent of the sampled farm households are in roughly the  same wealth position as they were 10 years earlier,  although more households experienced an increase in asset  wealth than a decline, which is consistent with Government  of Kenya findings of declining national poverty rates over  the same general period. 
	For the 25 percent of households  that did experience an appreciable change in asset wealth  between 1997 and 2007, we revisited 84 of these households  in 2008 with more detailed retrospective “life history”  surveys to capture a wider range of factors influencing  current household livelihoods. Households successfully  accumulating assets and rising out of poverty (i) were more  likely to have remained healthy and suffer no unexpected  deaths during the decade prior to the start of the initial  survey in 1997; (ii) were not adversely affected by  mortality that did occur during the panel period; (iii)  were consistently headed by a male; (iv) received  relatively more land from their parents at the time the  household was formed; and (v) parents who were relatively  well-off and educated. Moreover, the ascenders were able to  acquire more land, cultivate 70% more land, and increase  their use of fertilizer over the 2000-07 period, consistent  with the overall agricultural and economy-wide growth in  Kenya that occurred during the 2004-2007 period. 
Among  households reporting a significant decline in asset wealth,  roughly half experienced unexpected shocks, such as  premature death and chronic illness. These households  reported spending 22% of their annual incomes and 47% of  their assets on medicines and caregiving.  Households with  declining asset trajectories were also more likely to have  turned from male to female headed due to male mortality,  have two or more wives in the household, poorly educated  household heads, fathers of household heads who were  relatively uneducated, and relatively little land and other  assets inherited from parents.  Small inheritances among  the “descenders” can be traced to a smaller amount of land  per number of sons of the household head’s father.  The  descenders also tended to lose land and animal assets over  the panel period (in some cases due to disease and need to  pay for medical expenses) in sharp contrast to the  ascenders.  Perhaps surprisingly, the descenders were more  likely to use fertilizer, had higher fertilizer application  rates per acre cultivated, and were more likely to receive  agricultural credit than the ascender households.   
Consistently better-off households were more likely to (i)  have been male headed; (ii) have members with secondary  and/or post-secondary educations; (iii) not be polygamous;  (iv) received significantly more land and other assets at  the time the household was formed. They were also less  affected by mortality in the family.  These consistently  better-off households owned more land and applied more  organic and inorganic fertilizer than either the ascenders  or descenders.  However, they were no more likely to  receive agricultural credit or grow major cash crops than  the descenders. 
	These findings underscore the importance  of staying healthy in households’ ability to produce  agricultural surpluses, accumulate assets, and exit from  poverty. Households’ agricultural performance and earnings  over time is in many cases related to their lagged health  status.  The study also highlights the role of  intergenerational wealth transfers.  Poor households are  able to transfer little to the next generation, which then  makes it very difficult for them to climb out of poverty.   Lastly, all three groups as well as the overall nationwide  longitudinal sample of smallholder households reported a  noteworthy increase in their usage of fertilizer over the  1997-2007 period of input market liberalization. The  dramatic increase in fertilizer use during this period is  correlated with an improvement in national maize yields and  agricultural performance during the 2000-2007 period as  well as a modest decline in rural poverty rates.},
      url = {http://ageconsearch.umn.edu/record/103377},
      doi = {https://doi.org/10.22004/ag.econ.103377},
}