Understanding the Determinants

poverty profile describes the pattern of poverty, but is not principally concerned with explaining the causes of poverty. Yet, a satisfactory explanation of why some people are poor is essential if we are to be able to tackle the roots of poverty. Among the key causes, or at least correlates, of poverty are • Region-level characteristics, which include vulnerability to flooding or typhoons, remoteness, quality of governance, and property rights and their enforcement • Community-level characteristics, which include the availability of infrastructure (roads, water, electricity) and services (health, education), proximity to markets, and social relationships • Household and individual characteristics, among the most important of which are – Demographic, such as household size, age structure, dependency ratio, gender of head – Economic, such as employment status, hours worked, property owned – Social, such as health and nutritional status, education, shelter. Regression analysis is commonly undertaken to identify the effects of each of these characteristics on income (or expenditure) per capita. Attention is needed to choose the independent variables carefully, to be sure that they are indeed exoge-nous. A number of more exotic techniques are now available for this purpose, including classification and regression tree (CART) models and multiple-adaptive regression splines (MARS models)