Poverty dynamics and income inequality in the eastern Brazilian Amazon

Gilvan R. Guedes, Brown University
Alvaro O. D'Antona, Indiana University

Using household-level data from a representative sample of farmers in the Eastern Brazilian Amazon, this paper analyses poverty dynamics and income inequality among smallholders along the Transamazonica Highway within Pará State, between 1997 and 2005. We compare and contrast two main groups of farmers - settlers and new owners. The main goal of our analysis is to measure the change in poverty level among these smallholders over time, contrasting traditional poverty indexes based on income insufficiency with a suggested multidimensional index based on fuzzy logic, that we call Multidimensional Rural Poverty Index (MIRPI). MIRPI allows the analysis of the contribution of non-monetary income for poverty and inequality reduction. We believe that comparison between indexes will help to understand the role of social, political and environmental dimensions on poverty configuration and livelihood strategies of smallholders, and shed some light on viable although not simplistic ways of alleviating poverty in rural environments.