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Abstract

Using pseudo-panel data from five rounds of the Household Budget Survey (HBS), the authors estimate poverty dynamics (movement in and out of poverty over time) in Tanzania for more than a quarter century. The study finding shows that while extreme poverty has declined significantly during this period, basic need poverty has only declined slightly, and remains high in rural areas.鈥� For poverty dynamics, the study finding shows that the percentage of households moving out of poverty has been declining over time. Furthermore, the study findings show a high degree of extreme (food) poverty mobility but a low basic need poverty mobility, where relatively high degree of poverty mobility is observed more for urban than rural areas.

In addition, the findings reveal a greater proportion of households moving out of poverty than falling into poverty, however, the percentage of households falling and staying into poverty appears to increase over time, implying a decline in poverty reduction efforts. The authors estimates are closer and more consistent with other recent estimates on poverty mobility and vulnerability in a couple of sub-Saharan African countries, including earlier studies in Tanzania. The study adds to empirical literature that attempts to estimate poverty dynamics over a long period. More importantly, the study compares poverty dynamics over a long period by exploiting various cross-sectional surveys from 1991 to 2018 (over a quarter century).

This is an output of the Structural Transformation and Economic Growth (STEG) programme.

Citation

Hongoli J and Leyaro V. 鈥楨stimating poverty mobility in Tanzania: Evidence from pseudo-panel data 1991-2018鈥� Structural Transformation and Economic Growth (STEG) WP084, 2024

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