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Chronic and Transient Poverty: Measurement and Estimation, with Evidence from China

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Author Info
Jean-Yves Duclos
Abdelkrim Araar
John Giles

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Abstract

The paper contributes to the measurement of poverty and vulnerability in three ways. First, we propose a new approach to separating poverty into chronic and transient components. Second, we provide corrections for the statistical biases introduced when using a small number of periods to estimate the importance of vulnerability and transient poverty. Third, we apply these tools to the measurement of chronic and transient poverty in China using a rich panel data set that extends over approximately 17 years. We find that alternative measurement techniques yield significantly different estimates of the relative importance of chronic and transient poverty, and that precision of estimates is enhanced with simple statistical corrections.

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Paper provided by CIRPEE in its series Cahiers de recherche with number 0611.

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Date of creation: 2006
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Handle: RePEc:lvl:lacicr:0611

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Related research
Keywords: Poverty dynamics; Transient poverty; Chronic poverty; Permanent poverty; China;

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Find related papers by JEL classification:
C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Statistical Simulation Methods
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty

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    Other versions:
  6. Christiaensen, Luc. J. & Subbarao, Kalanidhi, 2004. "Toward an understanding of household vulnerability in rural Kenya," Policy Research Working Paper Series 3326, The World Bank. [Downloadable!]
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    Other versions:
  9. Takashi Kurosaki, 2006. "The measurement of transient poverty: Theory and application to Pakistan," Journal of Economic Inequality, Springer, vol. 4(3), pages 325-345, December. [Downloadable!] (restricted)
  10. John Giles & Kyeongwon Yoo, 2007. "Precautionary Behavior, Migrant Networks, and Household Consumption Decisions: An Empirical Analysis Using Household Panel Data from Rural China," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 534-551, 05. [Downloadable!] (restricted)
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    Other versions:
  12. Albert Park, 2006. "Risk and Household Grain Management in Developing Countries," Economic Journal, Royal Economic Society, vol. 116(514), pages 1088-1115, October. [Downloadable!] (restricted)
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    Other versions:
  15. Shubham Chaudhuri & Jyotsna Jalan & Asep Suryahadi, 2002. "Assessing household vulnerability to poverty from cross-sectional data: A methodology and estimates from Indonesia," Discussion Papers 0102-52, Columbia University, Department of Economics. [Downloadable!]
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  17. Chen, Shaohua & Ravallion, Martin, 1996. "Data in transition: Assessing rural living standards in Southern China," China Economic Review, Elsevier, vol. 7(1), pages 23-56. [Downloadable!] (restricted)
  18. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May. [Downloadable!] (restricted)
  19. Jyotsna Jalan & Martin Ravallion, 1998. "Geographic Poverty Traps?," Boston University - Institute for Economic Development 86, Boston University, Institute for Economic Development.
  20. Asep Suryahadi & Sudarno Sumarto, 2003. "Poverty and Vulnerability in Indonesia Before and After the Economic Crisis," Asian Economic Journal, East Asian Economic Association, vol. 17(1), pages 45-64, 03. [Downloadable!] (restricted)
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