Determinants of Poverty in Malawi: Evidence from the Fifth Integrated Household Survey 2019

Abstract

This study uses the 2019 Malawi Fifth Integrated Household Survey with 2,688 data to determine poverty factors in Malawi. Households’ subjective assessment of poverty having six levels is used with an ordered-probit model since it can easily catch deprivation in various aspects of people’s lives and complement the income-based poverty measurement for farmers in developing countries. Furthermore, consumption poverty using the annual per capita consumption value is compared with subjective poverty with a multinomial logit model. A partial proportional odds model is used as it rejects the parallel lines assumption. The overall results indicate that subjective and consumption poverty determinants overlap. But subjective poverty is more associated with household assets, natural disasters, aid, financial inclusion, food security, marital status, and education level than consumption poverty in Malawi. Policy support for continuing and developing subsidy programs for food, agricultural input, and life convenience is suggested since ongoing programs equally treat a variety of households and increase possibilities to escape both subjective and consumption poverty. Also, a rural extension program that provides asset management education is expected to draw overall welfare for vulnerable households. Finally, female welfare should be improved by reducing the wage gap and diversifying its welfare programs to improve the social perception of female labor.