Intertemporal deprivation in rural china: income and nutrition

Abstract

We analyse intertemporal poverty in two important dimensions – income and nutrition – in less developed northwest China during 2000–2004. Household intertemporal deprivations in these dimensions are estimated using measures which are sensitive to the precise sequence in which poor and non-poor spells occur. A generalised recursive selection model is then proposed to investigate the determinants of intertemporal deprivation in each dimension, allowing for the possibility that correlated unobservables drive the dual deprivations. Improvement in agricultural production is crucial for reducing both dimensions of intertemporal deprivation. We find evidence suggestive of intertemporal income-nutrition poverty traps. Higher labour productivity, especially in agriculture rather than local off-farm activities or out-migration, holds much potential for breaking the vicious circle. Agricultural innovation and mechanisation, regarded by the government as indispensable, yield mixed outcomes for alleviating intertemporal multi-dimensional deprivations.