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Poverty and Permanent Income: A Methodology for Cross-Section Data

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  • Ramsès H. ABUL NAGA
  • Enrico BOLZANI

Abstract

If the set of households which are income poor does not fully overlap with the set of the consumption poor, it could well be that income and consumption expenditure convey different information regarding an unobserved variable on the basis of which families allocate their resources intertemporally. This paper presents a methodology for predicting the unobserved permanent incomes of households using multiple welfare indicators typically available in cross-section data.

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Bibliographic Info

Article provided by ENSAE in its journal Annals of Economics and Statistics.

Volume (Year): (2006)
Issue (Month): 81 ()
Pages: 195-223

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Handle: RePEc:adr:anecst:y:2006:i:81:p:08

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  1. Chaudhuri, Shubham & Ravallion, Martin, 1994. "How well do static indicators identify the chronically poor?," Journal of Public Economics, Elsevier, Elsevier, vol. 53(3), pages 367-394, March.
  2. Hall, Robert E & Mishkin, Frederic S, 1982. "The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households," Econometrica, Econometric Society, Econometric Society, vol. 50(2), pages 461-81, March.
  3. Ramses ABUL NAGA & Robin BURGESS, 1997. "Prediction and Determination of Household Permanent Income," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP), Université de Lausanne, Faculté des HEC, DEEP 9705, Université de Lausanne, Faculté des HEC, DEEP.
  4. Richard Blundell & Ian Preston, 1997. "Consumption, inequality and income uncertainty," IFS Working Papers, Institute for Fiscal Studies W97/15, Institute for Fiscal Studies.
  5. Ramses H. Abul Naga, 1994. "Identifying the Poor: A Multiple Indicator Approach," STICERD - Distributional Analysis Research Programme Papers, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE 09, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  6. Milton Friedman & Simon Kuznets, 1954. "Income from Independent Professional Practice," NBER Books, National Bureau of Economic Research, Inc, National Bureau of Economic Research, Inc, number frie54-1.
  7. Daniel T. Slesnick, 1998. "Empirical Approaches to the Measurement of Welfare," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 36(4), pages 2108-2165, December.
  8. Glewwe, Paul & van der Gaag, Jacques, 1990. "Identifying the poor in developing countries: Do different definitions matter?," World Development, Elsevier, Elsevier, vol. 18(6), pages 803-814, June.
  9. Zellner, Arnold, 1970. "Estimation of Regression Relationships Containing Unobservable Independent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(3), pages 441-54, October.
  10. Tobin, James, 1970. "On Limiting the Domain of Inequality," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 13(2), pages 263-77, October.
  11. Buhmann, Brigitte, et al, 1988. "Equivalence Scales, Well-Being, Inequality, and Poverty: Sensitivity Estimates across Ten Countries Using the Luxembourg Income Study (LIS) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-42, June.
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Cited by:
  1. Ramses H. ABUL NAGA, 2001. "Social Welfare Orderings: A Life-Cycle Perspective," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP), Université de Lausanne, Faculté des HEC, DEEP 01.12, Université de Lausanne, Faculté des HEC, DEEP.
  2. Céline Antonin, 2009. "Age, revenu et comportements d'épargne des ménages : une analyse théorique et empirique sur la période 1978-2006," Sciences Po publications, Sciences Po info:hdl:2441/5l6uh8ogmqi, Sciences Po.
  3. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h6m8hj429 is not listed on IDEAS
  4. Riccardo Massari, 2005. "A Measure of Welfare Based on Permanent Income Hypothesis: An Application on Italian Households Budgets," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(1), pages 55-92, September.
  5. Gabriella Berloffa & Francesca Modena, 2009. "Income Shocks, Coping Strategies, and Consumption Smoothing. An Application to Indonesian Data," Department of Economics Working Papers, Department of Economics, University of Trento, Italia 0901, Department of Economics, University of Trento, Italia.

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