Estimating individual vulnerability to poverty with pseudo-panel data
This paper presents an original method to study individual earning dynamics using repeated cross-sectional data. Because panel data of individuals are seldom available in developing countries, it is difficult to study individual earning dynamics and related issues such as the propensity of earners to fall into poverty or vulnerability to poverty because of changes in earning. This paper shows that under the assumption that individual earning dynamics obey some basic properties and follow a simple stochastic process, the main parameters of this process can be recovered from repeated cross sectional data. The knowledge of these parameters then permits simulation of the earning dynamics of an individual, and estimate other measures of interest, such as an individual's vulnerability to poverty. The results show that model parameters recovered from pseudo-panels approximate reasonably well those estimated directly from a true panel. Moreover, implications of the model, in this case pseudo-panel measures of vulnerability to poverty, reflect closely those based on actual panel data.
|Date of creation:||01 Aug 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
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.:
- Angus Deaton & Christina Paxson, 1993.
"Intertemporal Choice and Inequality,"
NBER Working Papers
4328, National Bureau of Economic Research, Inc.
- Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S20-43, July.
- Sebastián Edwards & Alejandra Cox de Edwards, 1996. "Trade Liberalization and Unemployment: Policy Issues and Evidence from Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 33(99), pages 227-250.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:3375. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.