Determinants of poverty in Malawi

This paper analyzes the multi-dimensional poverty in Malawi by using the 2019 Malawi Fifth Integrated Household Survey (IHPS) data and suggests policy implications for practical poverty reduction in Malawi. Regarding the multi-dimensional characteristics of poverty, the study analyzed household’s both subjective and consumption poverty. The study set Malawian household’s subjective assessment of poverty and annual consumption value as a response variable, and selected socio-economic characteristics of households as explanatory variables based on main determinants of general, subjective and consumption poverty. The study adopted an ordered probit model and marginal effects for efficient and precise comprehension of the ordinal data, and also used multinomial logit model in order to compare subjective and consumption poverty. The results of the analysis indicate that the poverty status of Malawian households have strong relationships with household’s social networks, region, natural disaster, market condition, financial inclusion, household characteristics like age, sex and education level. Policy implications like supporting both agricultural inputs including Ganyu labor and coping climate disaster, increasing access to food, financial inclusion and technology adoption has been highlighted. Keywords: Malawi, poverty, rural development