In the extant literature either income or consumption expenditures as
measured over short periods of time has been regarded as proxies for
the material well-being of households. However, economists have
long recognized that a household’s sense of well-being depends not
just on its average income or expenditures, but also on the risks it
faces. Hence vulnerability is a more satisfactory measure of welfare.
In this paper we measure the extent of vulnerability as expected
poverty, and examine the importance of its determinants, on the basis
of a household survey for Fiji. We find that in Fiji, vulnerability (and
poverty) is largely a rural phenomenon. Moreover, the distribution of
vulnerability across different segments of the population can differ
significantly from the distribution of poverty. In addition, there is a
sizable fraction of the population Fiji observed to be non-poor but
estimated to be vulnerable to poverty. Thus, poverty reduction
strategies in Fiji need to incorporate not just alleviation efforts but
also prevention.