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Chronic and Transient Poverty: Measurement and Estimation, with Evidence from China

  • Jean-Yves Duclos
  • Abdelkrim Araar
  • John Giles

The paper contributes to the measurement of poverty and vulnerability in three ways. First, we propose a new approach to separating poverty into chronic and transient components. Second, we provide corrections for the statistical biases introduced when using a small number of periods to estimate the importance of vulnerability and transient poverty. Third, we apply these tools to the measurement of chronic and transient poverty in China using a rich panel data set that extends over approximately 17 years. We find that alternative measurement techniques yield significantly different estimates of the relative importance of chronic and transient poverty, and that precision of estimates is enhanced with simple statistical corrections.

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Paper provided by CIRPEE in its series Cahiers de recherche with number 0611.

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Date of creation: 2006
Date of revision:
Handle: RePEc:lvl:lacicr:0611
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  1. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
  2. John Giles & Kyeongwon Yoo, 2007. "Precautionary Behavior, Migrant Networks, and Household Consumption Decisions: An Empirical Analysis Using Household Panel Data from Rural China," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 534-551, August.
  3. Luc J. Christiaensen & Kalanidhi Subbarao, 2005. "Towards an Understanding of Household Vulnerability in Rural Kenya," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(4), pages 520-558, December.
  4. Ethan Ligon & Laura Schechter, 2003. "Measuring Vulnerability," Economic Journal, Royal Economic Society, vol. 113(486), pages C95-C102, March.
  5. Asep Suryahadi & Sudarno Sumarto, 2003. "Poverty and Vulnerability in Indonesia Before and After the Economic Crisis," Asian Economic Journal, East Asian Economic Association, vol. 17(1), pages 45-64, 03.
  6. Russell Davidson & Jean-Yves Duclos, 2000. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," Econometrica, Econometric Society, vol. 68(6), pages 1435-1464, November.
  7. Aaberge, Rolf & Mogstad, Magne, 2007. "On the Definition and Measurement of Chronic Poverty," IZA Discussion Papers 2659, Institute for the Study of Labor (IZA).
  8. Cesar Calvo & Stefan Dercon, 2005. "Measuring Individual Vulnerability," Economics Series Working Papers 229, University of Oxford, Department of Economics.
  9. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January.
  10. Rendtel, Ulrich & Langeheine, Rolf & Berntsen, Roland, 1998. "The Estimation of Poverty Dynamics Using Different Measurements of Household Income," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(1), pages 81-98, March.
  11. Blakorby, Charles & Donaldson, David, 1980. "Ethical Indices for the Measurement of Poverty," Econometrica, Econometric Society, vol. 48(4), pages 1053-60, May.
  12. Albert Park, 2006. "Risk and Household Grain Management in Developing Countries," Economic Journal, Royal Economic Society, vol. 116(514), pages 1088-1115, October.
  13. Bob Baulch & John Hoddinott, 2000. "Economic mobility and poverty dynamics in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 1-24.
  14. Shorrocks, Anthony F, 1995. "Revisiting the Sen Poverty Index," Econometrica, Econometric Society, vol. 63(5), pages 1225-30, September.
  15. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  16. Mary Jo Bane & David T. Ellwood, 1986. "Slipping into and out of Poverty: The Dynamics of Spells," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 1-23.
  17. Jeffrey M. Wooldridge, 2002. "Inverse probability weighted M-estimators for sample selection, attrition and stratification," CeMMAP working papers CWP11/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  18. Takashi Kurosaki, 2006. "The measurement of transient poverty: Theory and application to Pakistan," Journal of Economic Inequality, Springer, vol. 4(3), pages 325-345, December.
  19. Jalan, Jyotsna & Ravallion, Martin, 1998. "Transient Poverty in Postreform Rural China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 338-357, June.
  20. Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-82, December.
  21. Lipton, Michael & Ravallion, Martin, 1995. "Poverty and policy," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 41, pages 2551-2657 Elsevier.
  22. Benjamin, Dwayne & Brandt, Loren & Giles, John, 2005. "The Evolution of Income Inequality in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 769-824, July.
  23. Gustafsson, Bjorn & Shi, Li, 2002. "Income inequality within and across counties in rural China 1988 and 1995," Journal of Development Economics, Elsevier, vol. 69(1), pages 179-204, October.
  24. Bourguignon, Francois & Goh, Chor-ching & Kim, Dae Il, 2004. "Estimating individual vulnerability to poverty with pseudo-panel data," Policy Research Working Paper Series 3375, The World Bank.
  25. 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.
  26. repec:ebl:ecbull:v:9:y:2003:i:3:p:1-12 is not listed on IDEAS
  27. Gaiha, Raghav, 1988. "Income Mobility in Rural India," Economic Development and Cultural Change, University of Chicago Press, vol. 36(2), pages 279-302, January.
  28. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  29. Guillermo Cruces & Quentin T. Wodon, 2003. "Transient and chronic poverty in turbulent times: Argentina 1995-2002," Economics Bulletin, AccessEcon, vol. 9(3), pages 1-12.
  30. Atkinson, Tony & Cantillon, Bea & Marlier, Eric & Nolan, Brian, 2002. "Social Indicators: The EU and Social Inclusion," OUP Catalogue, Oxford University Press, number 9780199253494, July.
  31. Jyotsna Jalan & Martin Ravallion, 1998. "Geographic Poverty Traps?," Boston University - Institute for Economic Development 86, Boston University, Institute for Economic Development.
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  33. Chen, Shaohua & Ravallion, Martin, 1996. "Data in transition: Assessing rural living standards in Southern China," China Economic Review, Elsevier, vol. 7(1), pages 23-56.
  34. Satya Ranjan Chakravarty, 1983. "Ethically Flexible Measures of Poverty," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 74-85, February.
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