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Abstract

Economic reforms in Tanzania have resulted in low inflation and solid economic growth, but many observers question whether the standard of living of ordinary Tanzanians has improved. Furthermore, there is a strong suspicion that the benefits have been concentrated among the urban population and among rural households with good market access, leaving remote rural households behind. In this paper, we demonstrate a new approach to measuring poverty trends over time. First, the relationship between poverty and household characteristics is estimated using household budget survey data. Second, this relationship is applied to the same characteristics in Demographic and Health Surveys, four of which have been carried out in Tanzania. The results suggest that the headcount poverty rate has declined by almost 9 percentage points over 1991-2003. The percentagepoint decline has been similar in rural and urban areas. Although remote rural areas tend to be poorer than other rural areas, there is no evidence that remote areas have gained any less than other rural areas in terms of poverty reduction.

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