NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Heterogeneous Wealth Dynamics: On the Roles of Risk and Ability

Paulo Santos, Christopher B. Barrett

Chapter in NBER book The Economics of Poverty Traps (2019), Christopher B. Barrett, Michael R. Carter, and Jean-Paul Chavas, editors (p. 265 - 290)
Conference held June 28-29, 2016
Published in December 2018 by University of Chicago Press
© 2019 by the National Bureau of Economic Research

We study the causal mechanisms behind persistent poverty. Using original data on Boran pastoralists of southern Ethiopia, we find that nonlinear wealth dynamics arise purely due to shocks. In favorable states of nature, expected herd growth is linear and universal. We further show that ability to deal with shocks matters. Multiple stable equilibria characterize the wealth dynamics of herders of higher ability, while those with lower ability converge to a unique equilibrium at a small herd size.

This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
Order from Amazon.com

Machine-readable bibliographic record - MARC, RIS, BibTeX

This chapter first appeared as NBER working paper w22626, Heterogeneous Wealth Dynamics: On the Roles of Risk and Ability, Paulo Santos, Christopher B. Barrett
Commentary on this chapter: Comment, Edward B. Barbier
Users who downloaded this chapter also downloaded* these:
Ikegami, Carter, Barrett, and Janzen Poverty Traps and the Social Protection Paradox
Barrett, Carter, and Chavas Introduction to "The Economics of Poverty Traps"
Santos and Barrett w22626 Heterogeneous Wealth Dynamics: On the Roles of Risk and Ability
Friedman w5465 The Rise and Fall of Money Growth Targets as Guidelines for U.S. Monetary Policy
de Quidt and Haushofer w22973 Depression for Economists
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us