Poverty reduction continues to be at the forefront of economic development
eff orts in low-income countries, particularly in Sub-Saharan Africa, where poverty
rates remain high. Research on poverty dynamics documents that some
households are transient poor, in that they move in and out of poverty due to
internal and external changes in their environments, while others are chronically
poor (Datt and Hoogeveen 1999; Günther and Harttgen 2009). Traditional
static poverty estimates do not diff erentiate between the chronic and transient
poor (Dercon and Krishnan 2000), and the factors that give rise to chronic and
transient poverty diff er (Jalan and Ravallion 2000). Interventions that target
households based solely on the characteristics of the current poor are likely to
leave some groups unprotected in the face of negative shocks aff ecting their
economic well-being.