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Earnings efficiency and poverty dominance analysis: a spatial approach

  • Somnath Chattopadhyay

    ()

    (Indian Statistical Institute)

The paper estimates an earnings frontier by the method of Corrected Ordinary Least Squares (COLS) and categorizes households as efficient or inefficient based on some benchmark efficiency score and the estimated frontier. The spatial distribution of the poor and non poor households is then explored by construction of a poverty segregation curve across efficiency zones. Robust poverty comparisons across the efficient and inefficient groups reveal that poverty is in fact higher for the efficient group compared to the inefficient one. The paper thus indirectly supports the “poor but efficient hypothesis”.

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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 31 (2011)
Issue (Month): 3 ()
Pages: 2298-2318

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Handle: RePEc:ebl:ecbull:eb-11-00277
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  1. Bawa, Vijay S., 1975. "Optimal rules for ordering uncertain prospects," Journal of Financial Economics, Elsevier, vol. 2(1), pages 95-121, March.
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  11. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
  12. repec:ebl:ecbull:v:10:y:2007:i:21:p:1-6 is not listed on IDEAS
  13. Daneshvary, Nasser, et al, 1992. "Job Search and Immigrant Assimilation: An Earnings Frontier Approach," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 482-92, August.
  14. Bhaumik, Sumon Kumar & Chakrabarty, Manisha, 2009. "Is education the panacea for economic deprivation of Muslims?: Evidence from wage earners in India, 1987-2005," Journal of Asian Economics, Elsevier, vol. 20(2), pages 137-149, March.
  15. Caliendo, Marco & Kopeinig, Sabine, 2005. "Some Practical Guidance for the Implementation of Propensity Score Matching," IZA Discussion Papers 1588, Institute for the Study of Labor (IZA).
  16. Davidson, Russell & Duclos, Jean-Yves, 1998. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," Cahiers de recherche 9805, Université Laval - Département d'économique.
  17. Melissa Osborne & Herbert Gintis & Samuel Bowles, 2001. "The Determinants of Earnings: A Behavioral Approach," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1137-1176, December.
  18. Xavier Ramos & Jacques Silber, 2005. "On The Application Of Efficiency Analysis To The Study Of The Dimensions Of Human Development ," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(2), pages 285-309, 06.
  19. Marcelo Medeiros, 2006. "The Rich and the Poor: The Construction of an Affluence Line from the Poverty Line," Social Indicators Research, Springer, vol. 78(1), pages 1-18, 08.
  20. Truett, Dale & Roberts, Blaine, 1973. "Classical Production Functions, Technical Optimality, and Scale Adjustments of the Firms," American Economic Review, American Economic Association, vol. 63(5), pages 975-82, December.
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  22. Peichl, Andreas & Schaefer, Thilo & Scheicher, Christoph, 2008. "Measuring Richness and Poverty: A Micro Data Application to Europe and Germany," IZA Discussion Papers 3790, Institute for the Study of Labor (IZA).
  23. Jensen, Uwe & Gartner, Hermann & Rässler, Susanne, 2006. "Measuring overeducation with earnings frontiers and multiply imputed censored income data," IAB Discussion Paper 200611, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  24. Zuniga Gonzalez, Carlos Alberto, 2009. "Technical efficiency of organic fertilizer in small farms of Nicaragua: 1998-2005," MPRA Paper 49352, University Library of Munich, Germany, revised 24 Sep 2010.
  25. Robert Hutchens, 2004. "One Measure of Segregation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(2), pages 555-578, 05.
  26. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  27. Christiaensen, Luc & Scott, Christopher & Wodon, Quentin, 2002. "Poverty Measurement and Analysis," MPRA Paper 45362, University Library of Munich, Germany.
  28. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
  29. Michal Brzezinski, 2010. "Income Affluence in Poland," Social Indicators Research, Springer, vol. 99(2), pages 285-299, November.
  30. Somnath Chattopadhyay, 2011. "Inter-regional Poverty Comparisons: Case of West Bengal," Journal of Quantitative Economics, The Indian Econometric Society, vol. 9(2), pages 104-122, July.
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