IDEAS home Printed from https://ideas.repec.org/p/shr/wpaper/03-06.html

Poverty Measurement Under Risk Aversion Using Panel Data

Author

Listed:
  • Paul MAKDISSI

    (D´epartement d’´economique and CEREF, Universit´e de Sherbrooke, 2550 boulevard de l’Universit´e, Sherbrooke, Qu´ebec, Canada, J1K 2R1)

  • Quentin WODON

    (LCSPR, World Bank, 1818 H Street, NW, Washington, DC 20433, USA)

  • Guillermo Cruces

    (STICERD, London School of Economics, Houghton Street, London, WC2A 2AE,United Kingdom)

Abstract

This paper shows how to take into account risk aversion when measuring poverty under income variability. An application to British panel data suggests that income and poverty comparisons between the self-employed and other groups of households are sensitive to assumptions on the degree of risk aversion. The results point to the importance of panel data in order to account for risk aversion and income variability in the measurement of poverty.

Suggested Citation

  • Paul MAKDISSI & Quentin WODON & Guillermo Cruces, 2003. "Poverty Measurement Under Risk Aversion Using Panel Data," Cahiers de recherche 03-06, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    • Handle: RePEc:shr:wpaper:03-06
    as

    Download full text from publisher

    File URL: http://gredi.recherche.usherbrooke.ca/wpapers/03_06_pm.pdf
    File Function: First version, 2003
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. repec:ebl:ecbull:v:9:y:2003:i:1:p:1-10 is not listed on IDEAS
    3. Paul Makdissi & Quentin Wodon, 2003. "Risk-adjusted measures of wage inequality and safety nets," Economics Bulletin, AccessEcon, vol. 9(1), pages 1-10.
    4. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    5. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June.
    6. Bradbury,Bruce & Jenkins,Stephen P. & Micklewright,John (ed.), 2001. "The Dynamics of Child Poverty in Industrialised Countries," Cambridge Books, Cambridge University Press, number 9780521004923, January.
    7. 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.
    8. Bradbury,Bruce & Jenkins,Stephen P. & Micklewright,John (ed.), 2001. "The Dynamics of Child Poverty in Industrialised Countries," Cambridge Books, Cambridge University Press, number 9780521803106, January.
    9. Simon C. Parker, 2003. "The distribution of wealth of older self-employed Britons," Fiscal Studies, Institute for Fiscal Studies, vol. 24(1), pages 23-43, March.
    10. Stefan Dercon & Pramila Krishnan, 2000. "Vulnerability, seasonality and poverty in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 25-53.
    11. repec:bla:revinw:v:45:y:1999:i:2:p:263-74 is not listed on IDEAS
    12. Stephen P. Jenkins, 2000. "Modelling household income dynamics," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(4), pages 529-567.
    13. 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.
    14. Friend, Irwin & Blume, Marshall E, 1975. "The Demand for Risky Assets," American Economic Review, American Economic Association, vol. 65(5), pages 900-922, December.
    15. Hildreth, Clifford & Knowles, Glenn J., 1982. "Some Estimates of Farmers' Utility Functions," Technical Bulletins 54545, University of Minnesota, Agricultural Experiment Station.
    16. Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cruces, Guillermo, 2005. "Income fluctuation, poverty and well-being over time: theory and application to Argentina," LSE Research Online Documents on Economics 6545, London School of Economics and Political Science, LSE Library.
    2. Paul MAKDISSI & Quentin WODON, 2004. "Price Liberalization and Farmer Welfare Under Risk Aversion: Cotton in Benin and Ivory Coast," Cahiers de recherche 04-09, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    3. Gustav Kjellsson & Dennis Petrie & Tom (T.G.M.) van Ourti, 2018. "Measuring income-related inequalities in risky health prospects," Tinbergen Institute Discussion Papers 18-007/V, Tinbergen Institute.
    4. Pene Kalulumia & Denis Bolduc, 2004. "Generalized Mixed Estimation Of A Multinomial Discretecontinuous Choice Model For Electricity Demand," Cahiers de recherche 04-01, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    5. Nouve, Kofi & Bambio, Yiriyibin & Kabore, Samuel & Wodon, Quentin, 2010. "Risque et mesures de la pauvreté rurale au Burkina Faso [Risk and Measures of Rural Poverty in Burkina Faso]," MPRA Paper 34374, University Library of Munich, Germany.
    6. Petr Hanel, 2003. "Impact Of Government Support Programs On Innovation By Canadian Manufacturing Firms," Cahiers de recherche 04-02, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guillermo Cruces & Quentin Wodon, 2007. "Risk-adjusted poverty in Argentina: measurement and determinants," Journal of Development Studies, Taylor & Francis Journals, vol. 43(7), pages 1189-1214.
    2. Walelign, Solomon Zena & Charlery, Lindy & Smith-Hall, Carsten & Chhetri, Bir Bahadur Khanal & Larsen, Helle Overgaard, 2016. "Environmental income improves household-level poverty assessments and dynamics," Forest Policy and Economics, Elsevier, vol. 71(C), pages 23-35.
    3. repec:ebl:ecbull:v:9:y:2003:i:3:p:1-12 is not listed on IDEAS
    4. Ravi Kanbur, 2008. "Globalization, Growth, and Distribution," World Bank Publications - Books, The World Bank Group, number 28017, April.
    5. Azeem, Muhammad Masood & Mugera, Amin W. & Schilizzi, Steven, 2016. "Poverty and vulnerability in the Punjab, Pakistan: A multilevel analysis," Journal of Asian Economics, Elsevier, vol. 44(C), pages 57-72.
    6. Anh T. Le, 1999. "Empirical Studies of Self‐Employment," Journal of Economic Surveys, Wiley Blackwell, vol. 13(4), pages 381-416, September.
    7. Bayudan-Dacuycuy, Connie & Lim, Joseph Anthony, 2013. "Family size, household shocks and chronic and transient poverty in the Philippines," Journal of Asian Economics, Elsevier, vol. 29(C), pages 101-112.
    8. James E. Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster-Greer-Thorbecke (FGT) Poverty Measures: Twenty-Five Years Later," Working Papers 2010-14, The George Washington University, Institute for International Economic Policy.
    9. Giuliano Guerra & Roberto Patuelli, 2016. "The Role of Job Satisfaction in Transitions into Self–Employment," Entrepreneurship Theory and Practice, , vol. 40(3), pages 543-571, May.
    10. Liu, Xiaoying & Hannum, Emily, 2017. "Early poverty exposure predicts young adult educational outcomes in China," China Economic Review, Elsevier, vol. 44(C), pages 79-97.
    11. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    12. Javier Alejo & Santiago Garganta, 2014. "Pobreza Crónica y Transitoria: Evidencia para Argentina 1997-2012," CEDLAS, Working Papers 0175, CEDLAS, Universidad Nacional de La Plata.
    13. Katsushi Imai, 2003. "The Employment Guarantee Scheme as a Social Safety Net - Poverty Dynamics and Poverty Alleviation," Economics Series Working Papers 149, University of Oxford, Department of Economics.
    14. Mai, Tung & Mahadevan, Renuka, 2016. "A research note on the poverty dynamics and cost of poverty inequality: Case study of Indonesia," Economic Analysis and Policy, Elsevier, vol. 49(C), pages 100-107.
    15. Haddad, Lawrence & Ahmed, Akhter, 2003. "Chronic and Transitory Poverty: Evidence from Egypt, 1997-99," World Development, Elsevier, vol. 31(1), pages 71-85, January.
    16. Edwin Fourrier-Nicolaï & Michel Lubrano, 2020. "Bayesian inference for TIP curves: an application to child poverty in Germany," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(1), pages 91-111, March.
    17. Duclos, Jean-Yves & Araar, Abdelkrim & Giles, John, 2010. "Chronic and transient poverty: Measurement and estimation, with evidence from China," Journal of Development Economics, Elsevier, vol. 91(2), pages 266-277, March.
    18. Timm Bönke & Carsten Schröder, 2009. "The German spatial poverty divide: poorly endowed or bad luck?," Working Papers 118, ECINEQ, Society for the Study of Economic Inequality.
    19. repec:diw:diwwpp:dp256 is not listed on IDEAS
    20. Bayudan-Dacuycuy, Connie & Lim, Joseph Anthony, 2013. "Family Size, Household Shocks and Chronic and Transient Poverty in the Philippine Households," MPRA Paper 64739, University Library of Munich, Germany.
    21. Jose Plehn-Dujowich, 2010. "A theory of serial entrepreneurship," Small Business Economics, Springer, vol. 35(4), pages 377-398, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:shr:wpaper:03-06. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jean-François Rouillard (email available below). General contact details of provider: https://edirc.repec.org/data/deushca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.