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On Some Statistical Methods for Modelling the Incidence of Poverty

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  • Stephen Pudney

Abstract

This paper analyzes a common method of estimating the pattern of individual characteristics associated with poverty – the logit/probit technique applied to a dummy variable identifying those individuals who are below a poverty line. We show that this procedure is seriously flawed by a fundamental logical difficulty and further statistical complications when the poverty line is estimated or when generalized poverty measures are used. An alternative approach is proposed, based on a semi‐parametric series expansion appproximation to the conditional income distribution. Estimation, testing and summary procedures are established and applied to Hungarian survey data.
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Suggested Citation

  • Stephen Pudney, "undated". "On Some Statistical Methods for Modelling the Incidence of Poverty," Discussion Papers in Public Sector Economics 97/1, Division of Economics, School of Business, University of Leicester.
    • Handle: RePEc:lec:lpserc:97/1
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    Cited by:

    1. Mussa, Richard, 2015. "Catastrophic health payments in Malawi: analysis of determinants using a zero-inflated beta regression," MPRA Paper 65201, University Library of Munich, Germany.
    2. Christophe Muller & Sami Bibi, 2006. "Focused Targeting against Poverty Evidence from Tunisia," IDEP Working Papers 0602, Institut d'economie publique (IDEP), Marseille, France, revised Apr 2006.
    3. Martin Biewen & Stephen P. Jenkins, 2002. "Accounting for Poverty Differences between the United States, Great Britain, and Germany," Discussion Papers of DIW Berlin 311, DIW Berlin, German Institute for Economic Research.
    4. Domma, Filippo & Condino, Francesca & Giordano, Sabrina, 2018. "A new formulation of the Dagum distribution in terms of income inequality and poverty measures," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 511(C), pages 104-126.
    5. repec:dau:papers:123456789/4335 is not listed on IDEAS
    6. Christophe MULLER & Sami BIBI, 2008. "Focused Transfer Targeting against Poverty Evidence from Tunisia," THEMA Working Papers 2008-37, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    7. Christophe Muller & Sami Bibi, 2010. "Refining Targeting against Poverty Evidence from Tunisia," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(3), pages 381-410, June.

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