Does Geography Have Impact on Poverty in India?

Abstract

Institutions play an important role in explaining poverty. Along with institution, fundamental forces like geography and climate influence poverty too. Analysis shows that probability of being poor is high for countries at the equator but it declines with latitude. Empirical evidence in India does not support this fact. Wide variation of poverty exists across the states in India. It has been observed that there is an upward linear trend in poverty rate as longitude increases, i.e. a west-to-east variation of poverty instead of north-to-South variation in global scenario. Other geography-related variable is “maximum temperature in winter” which influences poverty negatively. “Maximum temperature in summer” has a positive relation with poverty rate. These three variables (i.e. longitude, maximum temperature in summer and maximum temperature winter) can explain poverty rate by forty-eight percent.