Poverty and Household Decisions – An Exploration of Possible Interdependence

Household poverty is a multidimensional phenomenon, of which access to income/productive assets/resources, food security and nutrition; education, health, housing and sanitation etc. are regarded as the major dimensions. A priori, one would expect a household’s major socio-economic decisions like those relating to production, consumption and factor market participation, to be significantly influenced by whether or not the household is poor in respect of one or several dimensions of poverty. On the other hand, poverty and household decisions may be interrelated such that poverty may be self-reinforcing. This study, which is based on a survey conducted in two districts in Assam, a state in the North Eastern region of India, attempts to identify the sets of poverty dimensions and decisions that mutually reinforce each other, through Structural Equation Modeling (SEM)