Assets, Rural Livelihood Strategies and Welfare Outcomes: A Case Study from South Assam, India

Abstract

This article uses income and asset data from a sample of 394 rural households from the remote and agriculturally backward region of the Barak Valley, located in the southern part of the north-eastern state of Assam in India, to construct a poverty profile for the area based on the asset structure of households. In doing so, the study goes beyond the traditional income-centric approach which treats the poor as a homogeneous group and takes a deeper look into the character of poverty in the region by segregating households on the basis of various poverty configurations. Further, using a combination of cluster analysis and propensity score matching methods, the study explores the relation between asset ownership and the choice of livelihood strategies and subsequently evaluates the impact of such choices on the income poverty status of rural households. The study finds that vulnerability is very high in the study area, with two-thirds of the rural households being afflicted with one type of deprivation or the other. However, the nature of deprivation being diverse, the study underscores the need for profiling poverty in terms of its structural and stochastic components and designing policy interventions suited to specific situations, for maximisation of welfare gains.