Measuring the attributes of poverty and its persistence: a case study of Eritrea

Abstract

This paper tries to identify the correlates of poverty in urban Eritrea using an estimation technique (theDOGEV model) that also allows for the inclusion of a measure of “persistence” in poverty levels fromcross-sectional estimation. The results suggest that 17 percent of the probability of being moderatelypoor and 22 percent of the probability of being extremely poor in Eritrea was attributable to this“persistence”—a predisposition toward poverty likely due to latent attributes related to past experienceof poverty itself. The results also suggest that, in the post-war economy of the mid-1990s, those withvocational training fared best among all education groups. Being a war veteran also had a strongnegative association with the poverty—reflecting successful attempts to support that group. The receiptof remittances also reduced the likelihood of poverty; though receipts from outside Eritrea had a muchstronger effect than receipts from within Eritrea.