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Inspecting the Poverty-Trap Mechanism: A Quantile Regression Approach

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  • Krüger Jens J.

    () (Darmstadt University of Technology)

Abstract

The issue of poverty traps is assessed using quantile regression. An augmentation of the usual convergence regressions by quadratic and cubic terms is used with emphasis on curve fitting rather than parameter estimation. The results show that the generic mechanism leading to poverty traps predominantly applies to countries with relatively low levels of income per capita or per worker that simultaneously have low growth rates in the vicinity and below the lowest quintile of the growth rate distribution. The validity of the results is supported by a nonparametric variant of quantile regression.

Suggested Citation

  • Krüger Jens J., 2009. "Inspecting the Poverty-Trap Mechanism: A Quantile Regression Approach," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 13(3), pages 1-18, May.
  • Handle: RePEc:bpj:sndecm:v:13:y:2009:i:3:n:2
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    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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