Savings, Risk-coping and Poverty Dynamics in Developing Countries

This book investigates savings and risk-coping behavior of rural households in developing countries, particularly focusing on portfolio choice and activity choice made by households. The relationship between anti-poverty interventions and risk is also examined. The book first focuses on the role of portfolio adjustment for households in mitigating crop-income shocks, drawing upon monthly and seasonal data constructed from the ICRISAT data in India. We confirm that households use crop inventory, currency and capital assets as buffer stock against transitory income shocks. Secondly, we investigate the extent to which public and market employment serve as an income stabilising role in India. We then statistically show that the Employment Guarantee Scheme has both promotional effects, the effects of helping the poor escape from poverty, and promotional effects, the effects of preventing the non-poor escaping from poverty. The final chapter scrutinises the role of livestock as liquid assets in rural Kenya. We show that many rural households are currently liquidity-constrained and liquidity constraints are closely associated with cattle-holding.