Is transient poverty different? Evidence for rural China

We define 'transient poverty' as the component of time-mean consumption pov erty at household level that is directly attributable to variability in con sumption; this can be thought of as a measure of vulnerability to falling c onsumption. The non-transient component then depends solely on mean consump tion over time,and we call this 'chronic poverty'. Using robust semi-parame tric; methods and household panel data for rural China we test whether tran sient poverty is determined by a process that is similar to chronic poverty . Commonly identified causes of poverty in this setting have weak explanato ry power for transient poverty and some of the factors determining transien t poverty do not matter to chronic poverty, or even have the opposite effec t. Successful policy responses to chronic poverty may still leave considera ble transient poverty.