On the Evolution of the Determinants of Household Poverty in Mexico: a Logistic Regression Analysis

Abstract: Mexico, the second largest economy in Latin America, has almost eradicated extreme poverty according to the Millennium Development Goals; however, official statistics show that by national standards poverty levels are still quite high, reaching up to half its population. This paper looks into how the determinants of poverty in Mexico have evolved after the last major economic crisis the country experienced in the mid-90s. Using biennial survey data from 1996-2012, this paper aims to answer a two-fold question: (i) which household characteristics (demographic, socio-economic, and place of residence) are associated with a higher probability of poverty, and (ii) how much have these determinants changed over time? The results show that being a larger-than-average, a rural-located, or a female-headed household, having a household head that had no formal education or whose work lied in agriculture or other primary activities are all highly associated with poverty. The analysis of the dynamics shows that the effects of gender, education, non-agricultural occupations, and household size changed significantly during the studied period. The results imply that the effect of education is decreasing as the average educational level rises, while holding an industrial or services job is still an important factor to avoid poverty.