Exploring Changes in Poverty in Zimbabwe between 1995 and 2001 using Parametric and Nonparametric Quantile Regression Decomposition Techniques

by Eriksson, Katherine

This paper applies and extends Machado and Matas parametric quantile decomposition method and a similar nonparametric technique to explore changes in welfare in Zimbabwe between 1995 and 2001. These methods allow us to construct a counterfactual distribution in order to decompose the shift into the part due to changes in endowments and that due to changes in returns. We examine two subsets of a nationally representative dataset and find that endowments had a positive effect but that returns account for more of the difference. In communal farming areas, the effect of returns was positive while, in urban Harare, it was negative.