Measuring Vulnerability to Asset-Poverty in Sub-Saharan Africa

SummaryThis paper presents a methodology to measure vulnerability to asset-poverty. Using repeated cross-section data, age–cohort decomposition techniques focusing on second-order moments can be used to identify and estimate the variance of shocks on assets and, therefore, the probability of being poor in the future. Estimates from the Ghana Living Standard Surveys show that expected asset-poverty is a reliable proxy for expected consumption-poverty. Applying the methodology to eight Demographic Health Surveys countries, households in rural areas are found to be unambiguously more vulnerable to poverty than those in urban areas.