Modelling poverty transitions in Spain: Do attrition and initial conditions really matter?
AbstractThe availability of panel data has allowed a comprehensive description of poverty exits and entries in Spain. However, most of the literature, so far, has ignored or not explicitly modelled the process of sample attrition and/or the initial conditions problem we face when studying poverty dynamics with survey data. The main objective of this work is to assess whether attrition and poverty status in the base year are endogenous processes to poverty transitions through unobserved heterogeneity. Our estimation follows the model recently proposed by Cappellari and Jenkins (2004a) and uses Maximum Likelihood Simulation techniques. Data is from the European Community Household Panel and refers to poverty transitions that take place between 1994 and 2000 in Spain. Results show that unobservables affecting initial conditions and sample retention are exogenous to those related with poverty transience. Yet, results prove to be sensitive to the choice of the poverty line.
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Bibliographic InfoPaper provided by IRISS at CEPS/INSTEAD in its series IRISS Working Paper Series with number 2008-08.
Length: 32 pages
Date of creation: Oct 2008
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poverty transitions ; trivariate probit ; attrition ; initial conditions;
Find related papers by JEL classification:
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-04 (All new papers)
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- REINSTADLER Anne & RAY Jean-Claude, 2010. "Macro Determinants of Individual Income Poverty in 93 Regions of Europe," CEPS/INSTEAD Working Paper Series 2010-13, CEPS/INSTEAD.
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