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Welfare Dynamics Measurement: Two Definitions of a Vulnerability Line and Their Empirical Application

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  • Hai‐Anh H. Dang
  • Peter F. Lanjouw

Abstract

We propose a new approach to develop vulnerability lines that are explicitly anchored to the idea of a sub‐set of the population at risk of falling into poverty. We suggest that lines developed in this way can also be applied for the purpose of identifying the middle class (or “secure”). We illustrate that such vulnerability lines can be straightforwardly estimated with panel data, drawing on data from the USA and Vietnam. Importantly, given the relative scarcity of panel datasets, we show further that our method can be applied to synthetic panel datasets. We demonstrate this by means of an illustration using repeated cross‐section data from India. Our results indicate that in Vietnam and India during the 2000s, the population shares that can be designated as poor and as secure have, respectively, been falling and expanding, with the vulnerable share of the population remaining fairly stable. Sharply contrasting trends are seen in the USA.

Suggested Citation

  • Hai‐Anh H. Dang & Peter F. Lanjouw, 2017. "Welfare Dynamics Measurement: Two Definitions of a Vulnerability Line and Their Empirical Application," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(4), pages 633-660, December.
  • Handle: RePEc:bla:revinw:v:63:y:2017:i:4:p:633-660
    DOI: 10.1111/roiw.12237
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    Citations

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    Cited by:

    1. Dang,Hai-Anh H. & Lokshin,Michael M. & Abanokova,Ksenia & Bussolo,Maurizio, 2018. "Inequality and Welfare Dynamics in the Russian Federation during 1994-2015," Policy Research Working Paper Series 8629, The World Bank.
    2. Peter Lanjouw & Hai-Anh Dang, 2018. "Welfare dynamics in India over a quarter-century: Poverty, vulnerability, and mobility, 1987–2012," WIDER Working Paper Series 175, World Institute for Development Economic Research (UNU-WIDER).
    3. Dang, Hai-Anh & Abanokova, Kseniya & Lokshin, Michael, 2020. "Life Satisfaction, Subjective Wealth, and Adaptation to Vulnerability in the Russian Federation during 2002-2017," IZA Discussion Papers 13058, Institute of Labor Economics (IZA).
    4. Nicolas Hérault & Stephen P. Jenkins, 2019. "How valid are synthetic panel estimates of poverty dynamics?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(1), pages 51-76, March.
    5. Hai?Anh H. Dang & Peter Lanjouw, 2018. "Welfare dynamics in India over a quarter-century: Poverty, vulnerability, and mobility, 1987-2012," WIDER Working Paper Series wp-2018-175, World Institute for Development Economic Research (UNU-WIDER).
    6. Cameron, Grant J. & Dang, Hai-Anh H. & Dinc, Mustafa & Foster, James & Lokshin, Michael M., 2019. "Measuring the Statistical Capacity of Nations," GLO Discussion Paper Series 298, Global Labor Organization (GLO).
    7. Cesar Calvo, 2016. "Vulnerability to poverty: Theory," Working Papers 409, ECINEQ, Society for the Study of Economic Inequality.
    8. Ira N. Gang & Kseniia Gatskova & John Landon-Lane & Myeong-Su Yun, 2018. "Vulnerability to Poverty: Tajikistan During and After the Global Financial Crisis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(3), pages 925-951, August.
    9. Alfani, Federica & Dabalen, Andrew & Fisker, Peter & Molini, Vasco, 2015. "Vulnerability to malnutrition in the West African Sahel," Policy Research Working Paper Series 7171, The World Bank.
    10. Peter Lanjouw & Hai-Anh Dang, 2018. "Inequality trends and dynamics in India: The bird’s-eye and the granular perspectives," WIDER Working Paper Series 189, World Institute for Development Economic Research (UNU-WIDER).
    11. Hai?Anh H. Dang & Peter Lanjouw, 2018. "Inequality trends and dynamics in India: The bird's-eye and the granular perspectives," WIDER Working Paper Series wp-2018-189, World Institute for Development Economic Research (UNU-WIDER).
    12. Alfani, Federica & Dabalen, Andrew & Fisker, Peter & Molini, Vasco, 2019. "Vulnerability to stunting in the West African Sahel," Food Policy, Elsevier, vol. 83(C), pages 39-47.
    13. World Bank, 2016. "Tunisia Poverty Assessment 2015," World Bank Other Operational Studies 24410, The World Bank.

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