Decomposition and determinants of urban monetary poverty in Colombia. A study at the city level

Abstract

This paper studies the influence of income growth, local price variations, distributive changes, and the socio-demographic and economic characteristics of households on the reduction of urban monetary poverty in Colombia during the period 2002-2018. The article decomposes the changes in poverty between growth, distribution, and line effects (local prices), and estimates a logit model to assess the factors associated with poverty. The results suggest that the growth and redistribution effects tended to reduce poverty in all cities, while the line effect tended to increase it. In cities with high levels of poverty, such as Cúcuta, Montería, and Cartagena, the reduction of poverty during the period would have been greater, if the behavior of local prices had allowed it.