Transient and Chronic Rural Household Poverty: Evidence from Kenya

Most of the earlier studies of poverty in Kenya have basically been static in nature. They have attempted to measure household welfare -- incidence, gap and severity -- at a point in time. Such studies are undeniably vital. However, they do not necessarily provide a good indication of welfare stability over time. This study makes an empirical contribution to poverty analysis in Kenya by incorporating poverty dynamics dimension. We first examine poverty dynamics using economic transition matrices. Next, we decompose total poverty into transient and chronic poverty components using transient poverty as censored fluctuation and equally-distributed equivalent poverty gaps approaches for comparison. The latter approach introduces inequality into poverty decomposition. Finally, we establish important correlates of poverty components using quantile-censored and non-parametric regressions. Given the high rural household poverty incidences and the country's limited resources, this study has critical implications for economic policy in Kenya.