Regional Agricultural Endowments and Shifts of Poverty Trap Equilibria: Evidence from Ethiopian Panel Data

We examine changes in patterns of equilibria over time and across regions, applied to the Ethiopia Rural Household Survey. We revisit incidence of multiple equilibria using new nonparametric techniques, and examine single equilibria that remain stagnant below the poverty line. Using quantile regressions, we identify differences across the income distribution. We introduce the empirical analysis of sequences of equilibria. We identify a single equilibrium in 1994–1999 but find a second, higher equilibrium emerging in 1999–2004 – evidencing a shift from unimodal toward a bimodal asset distribution. The most deprived region exhibits a low-level stagnant equilibrium despite significant rural income growth nationwide.