Poverty in Kagera, Tanzania: Characteristics, Causes and Constraints

This paper analyses the determinants of household welfare in the Northwest region of Tanzania using microlevel cross section data. Despite having gone through a series of structural adjustment programs in the late1980s, Tanzania is still considered one of the poorest countries in Sub-Saharan Africa. The paper argues that the determinants of household welfare are numerous and complex, ranging from individual and household to community and social characteristics, but that the relative importance of these factors varies across the welfare distribution. Using quantile regressions, we find that human, social and physical capital all play a significant role in improving households’ living standards, but that the relatively poor are harmed more by weather shocks because they face more constraints in diversifying out of agriculture. Our results also reveal subtle insights into the relationships between gender and poverty. JEL Codes: D31, D63, I32, O12, O15