TY  - JOUR
AU  - Santos, Paulo
AU  - Barrett, Christopher B
TI  - Heterogeneous Wealth Dynamics: On the Roles of Risk and Ability
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 22626
PY  - 2016
Y2  - September 2016
DO  - 10.3386/w22626
UR  - http://www.nber.org/papers/w22626
L1  - http://www.nber.org/papers/w22626.pdf
N1  - Author contact info:
Paulo Santos
Department of Economics
Monash University
Building 11 E Clayton
Victoria 3800 Australia
E-Mail: Paulo.Santos@monash.edu

Christopher B. Barrett
12 Brookhaven Drive
Ithaca, NY 14850
Tel: 1.607.255.4489 
E-Mail: cbb2@cornell.edu
M1  - published as Paulo Santos, Christopher B. Barrett. "Heterogeneous Wealth Dynamics: On the Roles of Risk and Ability," in Christopher B. Barrett, Michael R. Carter, and Jean-Paul Chavas, editors, "The Economics of Poverty Traps" University of Chicago Press (2019)

M3  - presented at "The Economics of Asset Accumulation and Poverty Traps", June 28-29, 2016
AB  - This paper studies the causal mechanisms behind persistent poverty. Using original data on Boran pastoralists of southern Ethiopia, we find that heterogeneous and nonlinear wealth dynamics arise purely in adverse states of nature. In favorable states, expected herd grow is quasi-linear and universal. We further show that those with lower herding ability, as reflected in past herd growth data, converge to a unique equilibrium at a small herd size while those with higher ability exhibit multiple stable dynamic wealth equilibria.
ER  -