Discerning Transient from Chronic Poverty in Nicaragua: Measurement with a two period panel data set
This paper deals with consumption dynamics and its effects on poverty. An econometric model is proposed in which changes in consumption across time are seen as fluctuations around the level of consumption that each family can sustain in the long term. The advantages of this approach are twofold. First, it allows identification of the main determinants of changes in poverty. Second, it allows distinguishing between chronic and transient poverty, by defining as chronically poor those households whose level of consumption sustainable in the long term lies below the poverty line. This definition of chronic poverty represents a change with respect to previous works on the subject, in which chronic poverty is defined with reference to the average level of consumption (or income) observed at the family level along the temporal interval of the panel. The innovation of our proposal lies in the fact that all the information from the panel data set, relative to all households, is exploited in order to identify which level of consumption each family is tending toward through time. Furthermore, our definition of chronic poverty allows one to identify four different groups of families that differ by level of observed consumption and by potential to generate income for consumption. The four groups are characterized by different incidences of chronic and transient poverty, and hence require different kinds of anti-poverty policies and public support. Data from two Living Standards Measurement Surveys (LSMS) carried out by the World Bank in Nicaragua in 1998 and 2001 are used, while accounting for potential problems of attrition.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +39(6) 57051
Fax: +39 06 57055522
Web page: http://www.fao.org/es/esa/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ravallion, Martin, 1996.
"Issues in measuring and modeling poverty,"
Policy Research Working Paper Series
1615, The World Bank.
- Sean Becketti & William Gould & Lee Lillard & Finis Welch, 1985. "The Panel Study of Income Dynamics After Fourteen Years: An Evaluation," UCLA Economics Working Papers 361, UCLA Department of Economics.
- Neil McCulloch & Bob Baulch, 2000. "Simulating the impact of policy upon chronic and transitory poverty in rural Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 100-130.
- Jyotsna Jalan & Martin Ravallion, 2000. "Is transient poverty different? Evidence for rural China," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 82-99.
- Neil McCulloch & Bob Baulch, 2000. "Simulating the Impact of Policy upon Chronic and Transitory Poverty in Rural Pakistan," Econometrics 0004003, EconWPA.
- Joan R. Rodgers & John L. Rodgers, 1993. "Chronic Poverty in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 25-54.
- Alderman, Harold & Watkins, Susan Cotts & Kohler, Hans-Peter & Maluccio, John A. & Behrman, Jere R., 2000.
"Attrition in longitudinal household survey data,"
96, International Food Policy Research Institute (IFPRI).
- Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-82, December.
- Jalan, Jyotsna & Ravallion, Martin, 1998. "Transient Poverty in Postreform Rural China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 338-357, June.
- Maria Elena Bontempi, 2002. "The dynamic specification of the modified pecking order theory: Its relevance to Italy," Empirical Economics, Springer, vol. 27(1), pages 1-22.
When requesting a correction, please mention this item's handle: RePEc:fao:wpaper:0303. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gustavo Anríquez)The email address of this maintainer does not seem to be valid anymore. Please ask Gustavo Anríquez to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.