Introduction

Poverty, as a reflection of material, social or rights deprivation, is of concern in its own right, hence its reduction has been the focus of economic policy in both developed and developing countries. However, as pointed out by Gibson (2001), people may, in a given time period, be poor either because their mean quantitative proxy indicator for poverty, such as income, consumption expenditure or calories, falls below the national average (or poverty line) or because they have suffered a temporary shortfall in consumption or income. In other words, households or persons may be poor at a point in time either due to intertemporal variability in consumption or income, which is considered as ‘transient’, or because of the persistence of income or consumption expenditure below the poverty line, i.e. ‘chronic poverty’ (Jalan and Ravallion, 1998). Therefore, for effective poverty reduction programmes it is important to know not only those who are currently poor but also those who are vulnerable to poverty.

In participatory poverty assessments of rural and urban communities it was found that ‘frequently local understandings of people in poor rural and urban communities of the key elements in sustaining their livelihoods concur more with the concept of “vulnerability” than that of poverty. The idea of a secure livelihood is frequently more important than the incentive to maximise income’ (Norton et al., 1995). Participatory poverty assessments conducted in Ghana reveal that vulnerability is an important aspect of the perception of poverty. Women in rural Ghana do not consider their households to be secure.