A community-based qualitative-quantitative poverty methodology called the Stages-of-Progress approach was used to assess household poverty dynamics and the role of livestock in 40 communities and over 3,800 households representing two different highland regions of Peru (Puno and Cajamarca). Key to the approach used was to define with the participating communities a common understanding of poverty. The major reasons for movements into or out of poverty were elicited at both the community and household-level, and in particular, the role that livestock play in the different pathways was examined. The study finds that households typically move out of poverty by first taking care of their household food requirements, then investing (in the following order) in clothing, shelter, small animals such as chickens and guinea pigs, basic education for their children, a small plot of land, followed by indigenous breeds of larger livestock, including sheep, cattle, alpacas, and llamas. Beyond these initial stages of progress, households are no longer considered poor. Households in these communities have experienced quite dissimilar fates. While some formerly poor households have escaped poverty, some formerly non-poor households have become impoverished during the same period. The factors or events (often a chain of events) leading to upward and downward movements were remarkably similar across all 40 communities, but the relative importance of specific factors influencing poverty did vary by region. Also, while large movements into and out of poverty were found in both regions, significant regional differences exist. In Cajamarca, 17 percent of households managed to climb out of poverty in the last 25 years, while 15 percent fell into poverty at the same time. In Puno, 42 percent of households escaped poverty, while five percent became impoverished during the same period. The authors conclude that making progress in poverty reduction will require accelerating escapes while simultaneously slowing down descents and that different policies will be needed to keep households from falling into poverty versus helping poor households overcome their poverty.
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