Determinants of Household Welfare and Poverty in Canaman, Camarines Sur

Abstract ―​

Bicol region is among the poorest in the country as reflected in many official data of the Philippine Statistics Authority (PSA). Its economic productivity is significantly lower compared to other regions. Various studies have attributed this situation primarily to natural calamities including typhoons, volcanic eruptions, prolonged dry spells, and even floods during the rainy season. The region is within the typhoon path with over 20 typhoons crossing the region every year which gravely affects agricultural productivity - one of its major economic drivers. This resulted in a pervasive poverty situation in the area. These are broad and general attributions, but there are other specific factors that are considered determinants of household poverty and their state of welfare. These were examined using the CBMS data from one of the municipalities in the region – Canaman in the province of Camarines Sur. To do this, there were two models were applied to analyze welfare and poverty in Canaman. First, Feasible Generalized Least Squares (FGLS) were used to identify variables influencing household welfare. This model is used to correct for heteroskedasticity encountered using OLS. To identify the factors contributing to the likelihood of a household being classified as poor, a Probit Model was used. Both models were regressed on a set of explanatory variables reflecting household head (HH) characteristics, household characteristics, marital status of the HH, employment status of the HH, and urbanity. Results showed that older HHs benefit from slightly higher HIAE, consequently reducing the risk of falling into poverty. This finding suggests that households with younger HHs should be prioritized by poverty alleviation programs. Female-headed households have been found to suffer from lower welfare and a greater risk of being poor. The findings also support previous results which indicated that marital status is an important determinant of welfare. It was found out that married households are better off than those with household heads who are single, have been separated, or are currently cohabiting.