Vulnerability and Poverty in Bangladesh

This study estimates ex ante poverty and vulnerability of households in Bangladesh using
Household Income and Expenditure Survey (HIES) data in 2005. Our results show that
poverty is not same as vulnerability as a substantial share of those currently above the poverty
line is highly vulnerable to poverty in the future. The study finds that those without education
or agricultural households are likely to be the most vulnerable. The geographical diversity of
vulnerability is considerable, for example, vulnerability in coastal division, i.e., Chittagoan
Division is almost double to that of Dhaka and almost four times higher than Khulna
Division. It is suggested that ex ante measures to prevent households from becoming poor as
well as ex post measures to alleviate those already in poverty should be combined in
evaluating poverty. For the chronic poor who lack economic assets, priority should be given
to reduction of consumption fluctuations and building up assets through a combination of
protective and promotional programmes. Access to financial services, for example, though
micro credit programmes, might help poor households build up assets as it smoothes income
and consumption, enables the purchase of inputs and productive assets, and provides
protection against crises.