Issues in Chronic Poverty : Panel Data Based Analysis

The distinction between chronic or extended duration poverty and transient poverty is rarely made in the substantial literature on poverty in India. Determination of poverty as chronic or temporary requires that the same households be tracked over time through a panel data set and/or use of life or event history and other qualitative approaches. This paper reviews the limited panel data based literature on chronic poverty in India as also the literature on other countries. It then uses panel data that longitudinally track 3,139 households in rural India to try to provide an initial identification and understanding of the characteristics of households that exhibit mobility out of poverty and of those that simply stay poor. The paper draws attention to the policy implications of this analysis