Changes in Living Standards in Villages in India 1975-2004: Revisiting the Icrisat Village Level Studies

Abstract

This paper examines changes in living conditions in the six villages in Andhra Pradesh and Maharashtra, initially surveyed during 1975-84. We link the original Village Level Survey (VLS) households to a new survey in the villages conducted during 2001-04 and further extensive survey work in 2005-06, including tracking survey of all individuals ever interviewed in the original VLS. Despite issues related to attrition and changes in the survey instruments, we find that monetary welfare indicators (such as incomes, assets, consumption and poverty), and non monetary indicators of well-being (such as basic literacy, education and health outcomes) have improved considerably. We find the considerable attrition rates observed can be linked to within-household relational variables such as gender, relationship to the head and birth order. Migrants have experienced faster welfare improvements than non-migrants, but more analysis is needed to confirm whether this is due to their initial characteristics or due to their migration. Finally, we explore the correlates of consumption and income growth, and changes in poverty. We find that consumption growth is linked to initial households characteristics, in particular the presence of high literacy in the household, and of young children, especially boys, in the baseline year (1983) is strongly correlated with growth. Other assets, such as land, have a negligible impact, suggesting that labour and human capital have been instrumental for growth. Poverty declined in all villages, but especially in the Mahbubnagar villages in Andhra Pradesh. Labour endowments and literacy appear to have been crucial. Surprisingly, lower caste groups have experienced faster poverty declines, although this effect is largely confined to Mahbubnagar in Andhra Pradesh. ContentsAbstract and acknowledgements (i) 10 2. The Data

“The Poor Stay Poor”: Household Asset Poverty Traps in Rural Semi-Arid India

“…While there is no conclusive explanation for this, it is likely due to an underestimation of consumption levels (Morduch, 2004;Townsend, 1994). As a consequence, the magnitude of the regression constant of household PLU estimates is consistent with widespread consumption poverty headcounts of 76% for VLS1 and 22% for VLS2 (Badiani et al, 2007). Second, the period over which households have been observed is long.…”

“…For comparison, in 2001 22% of households still lived below the low consumption poverty line of Rs. 500 (Badiani et al, 2007).…”

“…However, this would classify close to 90% of villagers as poor, including many households that would not be regarded as poor in the villages. Instead, I follow recent work by Badiani, Dercon, Krishnan, and Rao (2007) and use a lower cut off point of 500 Rupees in 1975-76 prices as the poverty line.…”

Is rainfed agriculture really a pathway from poverty?

“…For India, the most recent data presents information for six villages in Andhra Pradesh, averaged over four crop years (2001)(2002)(2003)(2004). The sample size for farm households included in both the first generation VLS in 1975-78 and the new VLS in 2001-04 was 269 households (Badiani et al 2007, (Ndjeunga and Savadogo, 2002). The data refer to 115 households that were surveyed in both 1985 and 2002.…”

“…Finally, the evidence suggests that the main driver of graduation from poverty has not been agriculture but income from non-farm sources. ICRISAT's village studies in semi-arid India show that while between 1975 and 2004 average income per capita rose by 114 %, only 4 % of this increase came from agriculture and only 1 % came from crop production (Badiani et al 2007). The decisive role of non-farm income for poverty reduction is confirmed by results at the all-India level (Krishna and Shariff, 2011).…”