In this paper, we focus on the role of assets in relation to chronic poverty. In particular, we consider the issue of whether it is not just low levels of assets which identify and explain chronic poverty. We also look at the asset accumulation process and test whether this displays non-linearities and non-convexities that could explain why some households experience persistent poverty. We test for evidence of the existence of an asset-based poverty trap mechanism across seven panel data sets, in five countries (Bolivia, South Africa, Tanzania, Uganda and Vietnam) from Africa, Asia and Latin America. The paper adds substantially to the existing evidence base on this issue.
McKay, A.; Perge, E. How strong is the evidence for the existence of poverty traps? A multi-country assessment. CPRC Working Paper No. 180. Chronic Poverty Research Centre, London, UK (2011) 45 pp. ISBN 978-1-906433-86-4