Understanding poverty dimensions and transitions in Malawi: A panel data approach

Abstract

Poverty alleviation remains one of the ancient goals of Malawi as the country has since 1994 adopted a poverty alleviation strategy throughout its developmental programs. Through the support of the World Bank, a poverty monitoring system was put in place whose data are collected through the Living Standards Measurement Surveys (LSMS). However, since the establishment of the LSMS, findings of different assessments and eras have revealed instabilities in the country’s poverty levels overtime. What remains unclear is whether households have been able to move out of poverty or not. The current study employed a two wave LSMS panel of 2016 and 2019 and assessed poverty dimensions including poverty incidence, depth and severity. The study further assessed the determinants of poverty transitions in order to understand movements in and out of poverty. Household size, gender of household head, education level of the household head, agricultural land holding sizes, access to credit, residence (urban or rural) and expected shocks significantly influenced the poverty dimensions and poverty transition. It is hence imperative that proper strategies that embrace robust and sustainable credit systems, improvement in literacy levels of the Malawian population, and further improving agricultural land productivity can help reduce poverty and further move households out of poverty. Such initiatives should take into consideration the gender divide and the rapid population growth faced by the country.