The analysis of poverty data with endogenous transitions
It is common to analyse poverty data broken down by household or economic status. Implicitly, it is assumed that people change state (for example, single, married, children, no children) for exogenous reasons. If we bring economic behaviour into the problem, then such transitions become endogenous. The data are then insufficient to identify the claims made from them. The distribution of the characteristics of the individuals in the states will be endogenous, and the state average poverty rate will depend on the composition of the individuals in the state as well as on the economic impact of being in that state per se. In this paper, we set out a simple model with endogenous transitions to make our point, and apply this to Family Expenditure Survey data for Britain. We show that our argument has empirical content for Britain.
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Volume (Year): 27 (2006)
Issue (Month): 1 (March)
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- Simon Burgess & Carol Propper, 1998.
"An Economic Model of Household Income Dynamics, with an Application to Poverty Dynamics among American Women,"
case09, Centre for Analysis of Social Exclusion, LSE.
- Burgess, Simon & Propper, Carol, 1998. "An Economic Model of Household Income Dynamics, with an Application to Poverty Dynamics among American Women," CEPR Discussion Papers 1830, C.E.P.R. Discussion Papers.
- Simon Burgess & Carol Propper, 1998. "An economic model of household income dynamics, with an application to poverty dynamics among American women," LSE Research Online Documents on Economics 6525, London School of Economics and Political Science, LSE Library.
- Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-433, June.
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