Livestock Asset Dynamics Amongst Pastoralists in Northern Kenya

Understanding household-level asset dynamics has important implications for designing relevant poverty reduction policies. To advance this understanding, we develop a microeconomic model to analyse the impact of a shock (e.g., a drought) on the behavioural decisions of pastoralists in Northern Kenya. Using household panel data, this study then explores the livestock asset dynamics using both non-parametric and semi-parametric techniques to establish the shape of the asset accumulation path and to determine whether multiple equilibria exist. More specifically, using tropical livestock units as a measure of livestock accumulation over time, we show not only that these assets converge to a single equilibrium but also that forage availability and herd diversity play a major role in such livestock accumulation.