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Identifying the Poor: A Multiple Indicator Approach

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  • Ramses H. Abul Naga

Abstract

The standard approach to the study of poverty assumes the existence of an ideal variable that captures the extent of deprivation. In this paper we postulate that poverty is involved with many dimensions. We use a latent variable framework to predict the extent of an individual's hardship as a function ?i =ax1i + bx2i +..., where the x's are indicators of i's income status, yi, and the latter variable is not observed.

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File URL: http://sticerd.lse.ac.uk/dps/darp/darp9.pdf
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Bibliographic Info

Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Distributional Analysis Research Programme Papers with number 09.

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Date of creation: Jun 1994
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Handle: RePEc:cep:stidar:09

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Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp

Related research

Keywords: Poverty; latent variable; indicators;

References

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  1. Milton Friedman & Simon Kuznets, 1954. "Income from Independent Professional Practice," NBER Books, National Bureau of Economic Research, Inc, number frie54-1, July.
  2. John Dreze & Peter Lanjouw & Nicholas Stern, 1992. "Economic Mobility and Agricultural Labour in Rural India: A Case Study," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 27, pages 25-54.
  3. Chaudhuri, Shubham & Ravallion, Martin, 1994. "How well do static indicators identify the chronically poor?," Journal of Public Economics, Elsevier, vol. 53(3), pages 367-394, March.
  4. Glewwe, P., 1990. "Efficient Allocation Of Transfers To The Poor: The Problem Of Unobserved Household Income," Papers 70, World Bank - Living Standards Measurement.
  5. Goldberger, Arthur S, 1972. "Structural Equation Methods in the Social Sciences," Econometrica, Econometric Society, vol. 40(6), pages 979-1001, November.
  6. Lillard, Lee A & Willis, Robert J, 1978. "Dynamic Aspects of Earning Mobility," Econometrica, Econometric Society, vol. 46(5), pages 985-1012, September.
  7. Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-82, December.
  8. Sawhill, Isabel V, 1988. "Poverty in the U.S.: Why Is It So Persistent?," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1073-119, September.
  9. Glewwe, Paul & van der Gaag, Jacques, 1990. "Identifying the poor in developing countries: Do different definitions matter?," World Development, Elsevier, vol. 18(6), pages 803-814, June.
  10. van Praag, Bernard M S & Hagenaars, Aldi J M & van Eck, Wim, 1983. "The Influence of Classification and Observation Errors on the Measurement of Income Inequality," Econometrica, Econometric Society, vol. 51(4), pages 1093-108, July.
  11. Anand, S. & Harris, C., 1989. "Food And Standard Of Living: An Analysis Based On Sri Lanka Data," Economics Series Working Papers 9984, University of Oxford, Department of Economics.
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Citations

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Cited by:
  1. Ramsès H. ABUL NAGA & Enrico BOLZANI, 2006. "Poverty and Permanent Income: A Methodology for Cross-Section Data," Annales d'Economie et de Statistique, ENSAE, issue 81, pages 195-223.
  2. 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, vol. 64(1), pages 55-92, September.
  3. Harkness, Susan, 2004. "Social and Political Indicators of Human Well-being," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Ramses H. Abul Naga, 1997. "Prediction and Sufficiency in the Model Factor Analysis," STICERD - Distributional Analysis Research Programme Papers 31, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  5. Abul Naga, Ramses H., 2003. "The allocation of benefits under uncertainty: a decision-theoretic framework," Economic Modelling, Elsevier, vol. 20(4), pages 873-893, July.

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