| Understanding how households escape poverty depends on understanding how they accumulate assets over time. Therefore, identifying the degree of linearity in household asset dynamics, and specifically any potential asset poverty thresholds, is of fundamental interest to the design of poverty reduction policies. If household asset holdings converged unconditionally to a single long run equilibrium, then all poor could be expected to escape poverty over time. In contrast, if there are critical asset thresholds that trap households below the poverty line, then households would need specific assistance to escape poverty. Similarly, the presence of asset poverty thresholds would mean that short term asset shocks could lead to long term destitution, thus... |
