ACCESS TO CREDIT AND SUSTAINABILITY OF RURAL HOUSEHOLDS POVERTY STATUS: A CASE FROM CÔTE D'IVOIRE

Abstract

Based on data from the Households Living Standard Survey (ENV2015), we analyze the impact of credit on poverty status stability (ex-post and ex-ante poverty) and then study the regional gaps between poverty and vulnerability to poverty in the rural environment in Côte d'Ivoire. We slightly modified the model of Chaudhuri et al. (2002) to estimate the vulnerability to poverty and consider the poverty index as our measure of poverty. We construct a latent variable that is equal to the square of the gap between poverty and vulnerability to poverty and then use a tobit model to estimate the influence of credit on that variable. Our results show that credit makes poverty status unstable by widening the gap between ex-post and ex-ante poverty (poverty and vulnerability to poverty). We also find that the regional distribution of poverty is different from that of vulnerability to poverty in the rural environment in Côte d'Ivoire.