Modelling Vulnerability in the UK
AbstractIn this paper we examine the concept of "vulnerability" (Townsend 1994) within thecontext of income mobility of the poor. We test for the dynamics of vulnerablehouseholds in the UK using Waves 1 - 12 of the British Household Panel Survey andfind that, of three different types of risks that we test for, household-specific shocksand economy-wide aggregate shocks have the greatest impact on consumption, incomparison to shocks to the income stream. Quantile-specific estimates revealspecific quantiles, particularly those around the poverty line which are mostsusceptible to be vulnerable to shocks to the income stream. The estimates are foundto be robust to household composition and year-specific shocks.
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Bibliographic InfoPaper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Distributional Analysis Research Programme Papers with number 89.
Date of creation: Feb 2007
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income variability; vulnerability; income dynamics; BHPS;
Other versions of this item:
- Sanghamitra Bandyopadhyay & Frank Cowell, 2007. "Modelling vulnerability in the UK," LSE Research Online Documents on Economics 2692, London School of Economics and Political Science, LSE Library.
- Sanghamitra Bandyopadhyay & Frank Cowell, 2007. "Modelling Vulnerability in the UK," Economics Series Working Papers 313, University of Oxford, Department of Economics.
- D1 - Microeconomics - - Household Behavior
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
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