South Asia has the largest concentration of the world’s poor, with over half a
billion people surviving on less than a dollar a day. One of the Millennium Development
Goals (MDG) aims to halve the proportion of the world’s people whose income is less
than one dollar a day and the proportion of people who suffer from hunger by the year
2015. The success of poverty alleviation programs in South Asia is critical if this MDG
is to be met. Within South Asia, Bangladesh has the highest incidence of poverty and
only India and China have larger numbers of poor people. It is estimated that nearly half
of Bangladesh’s population of 135 million people live below the poverty line. The
Human Poverty Index reported by the Human Development Report places Bangladesh at
the 86th position among 103 developing countries. Apart from high poverty levels and
low gender empowerment rates, the country also faces yearly natural disasters in the form
of floods. In this dissertation, we first analyze issues relating to chronic and transient
poverty following a major catastrophic event using a short panel of household data from
Bangladesh.