Modelling household well-being and poverty trajectories: An application to coastal Bangladesh

Abstract

Resource-based livelihoods are uncertain and potentially unstable due to variability over time, including seasonal variation: this instability threatens marginalised populations who may fall into poverty. However, empirical understanding of trajectories of household wellbeing and poverty is limited. Here, we present a new household-level model of poverty dynamics based on agents and coping strategies–the Household Economy And Poverty trajectory (HEAP) model. HEAP is based on established economic and social insights into poverty dynamics, with a demonstration of the model calibrated with a qualitative and quantitative household survey in coastal Bangladesh. Economic activity in Bangladesh is highly dependent on natural resources; poverty is widespread; and there is high variability in ecosystem services at multiple temporal scales. The results show that long-term decreases in poverty are predicated more on the stability of, and returns from, livelihoods rather than their diversification. Access to natural resources and ecosystem service benefits are positively correlated with stable income and multidimensional well-being. Households that remain in poverty are those who experience high seasonality of income and are involved in small scale enterprises. Hence, seasonal variability in income places significant limits on natural resources providing routes out of poverty. Further, projected economic trends to 2030 lead to an increase in well-being and a reduction in poverty for most simulated household types.