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The Estimation of Poverty Dynamics Using Different Measurements of Household Income

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  • Rendtel, Ulrich
  • Langeheine, Rolf
  • Berntsen, Roland
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    Abstract

    If surveys offer two different measurements of household income, one can use them simultaneously to identify the potential effects of measurement error on the observed-income mobility of the poor. In this paper, the authors investigate transition tables between subsequent income states. Latent Markov models are used to model incorrect classifications of income states. Misclassifications are interpreted as measurement error or spurious changes that are not consistent with a simple transition table model. The empirical results for the German Socio-Economic Panel (GSOEP) show that the observed transition tables overestimate the mobility between poverty states. Copyright 1998 by The International Association for Research in Income and Wealth.

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    Bibliographic Info

    Article provided by International Association for Research in Income and Wealth in its journal Review of Income & Wealth.

    Volume (Year): 44 (1998)
    Issue (Month): 1 (March)
    Pages: 81-98

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    Handle: RePEc:bla:revinw:v:44:y:1998:i:1:p:81-98

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    Cited by:
    1. Jean-Yves Duclos & Abdelkrim Araar & John Giles, 2006. "Chronic and Transient Poverty: Measurement and Estimation, with Evidence from China," Cahiers de recherche 0611, CIRPEE.
    2. Espen Villanger, 2003. "The effects of disasters on income mobility: Bootstrap inference and measurement error simulations," CMI Working Papers WP 2003:6, CMI (Chr. Michelsen Institute), Bergen, Norway.
    3. Ulrich Rendtel, 2006. "The 2005 Plenary Meeting on ‘‘Missing Data and Measurement Error’’," AStA Advances in Statistical Analysis, Springer, vol. 90(4), pages 493-499, December.
    4. Bigsten, Arne & Shimeles, Abebe, 2008. "The persistence of urban poverty in Ethiopia: A tale of two measurements," Working Papers in Economics 283, University of Gothenburg, Department of Economics.
    5. Ravallion, Martin, 2001. "Measuring aggregate welfare in developing countries - How well do national accounts and surveys agree?," Policy Research Working Paper Series 2665, The World Bank.
    6. Diana Worts & Amanda Sacker & Peggy McDonough, 2010. "Re-Assessing Poverty Dynamics and State Protections in Britain and the US: The Role of Measurement Error," Social Indicators Research, Springer, vol. 97(3), pages 419-438, July.

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