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Small area estimation-based prediction methods to track poverty : validation and applications

Author

Listed:
  • Christiaensen, Luc
  • Lanjouw, Peter
  • Luoto, Jill
  • Stifel, David

Abstract

Tracking poverty is predicated on the availability of comparable consumption data and reliable price deflators. However, regular series of strictly comparable data are only rarely available. Price deflators are also often missing or disputed. In response, poverty prediction methods that track consumption correlates as opposed to consumption itself have been developed. These methods typically assume that the estimated relation between consumption and its predictors is stable over time -- an assumption that cannot usually be tested directly. This study analyzes the performance of poverty prediction models based on small area estimation techniques. Predicted poverty estimates are compared with directly observed levels in two country settings where data comparability over time is not a problem. Prediction models that employ either non-staple food or non-food expenditures or a full set of assets as predictors are found to yield poverty estimates that match observed poverty well. This offers some support to the use of such methods to approximate the evolution of poverty. Two further country examples illustrate how an application of the method employing models based on household assets can help to adjudicate between alternative price deflators.

Suggested Citation

  • Christiaensen, Luc & Lanjouw, Peter & Luoto, Jill & Stifel, David, 2011. "Small area estimation-based prediction methods to track poverty : validation and applications," Policy Research Working Paper Series 5683, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5683
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Kilic, Talip & Sohnesen, Thomas, 2015. "Same Question but Different Answer Experimental Evidence on Questionnaire Design's Impact on Pverty Measured by Proxies," 2015 Conference, August 9-14, 2015, Milan, Italy 211850, International Association of Agricultural Economists.
    2. Alfani, Federica & Dabalen, Andrew & Fisker, Peter & Molini, Vasco, 2015. "Can we measure resilience ? a proposed method and evidence from countries in the Sahel," Policy Research Working Paper Series 7170, The World Bank.
    3. World Bank, "undated". "Africa's Pulse, October 2013 : An Analysis of Issues Shaping Africa's Economic Future," World Bank Other Operational Studies 20237, The World Bank.
    4. Hassine, Nadia Belhaj, 2015. "Economic Inequality in the Arab Region," World Development, Elsevier, vol. 66(C), pages 532-556.
    5. repec:oup:oxecpp:v:69:y:2017:i:4:p:939-962. is not listed on IDEAS
    6. World Bank, "undated". "Africa's Pulse, April 2013 : An Analysis of Issues Shaping Africa's Economic Future," World Bank Other Operational Studies 20238, The World Bank.
    7. Mohamed Douidich & Abdeljaouad Ezzrari & Roy Van der Weide & Paolo Verme, 2016. "Estimating Quarterly Poverty Rates Using Labor Force Surveys: A Primer," World Bank Economic Review, World Bank Group, vol. 30(3), pages 475-500.
    8. Ahmed, Faizuddin & Dorji, Cheku & Takamatsu, Shinya & Yoshida, Nobuo, 2014. "Hybrid survey to improve the reliability of poverty statistics in a cost-effective manner," Policy Research Working Paper Series 6909, The World Bank.
    9. Diana Chiliquinga & Gaurav Datt, 2016. "Changing Betas or Changing X’s? Evolution of Income and Poverty in Ecuador, 2001-12," Monash Economics Working Papers 14-16, Monash University, Department of Economics.
    10. Newhouse, D. & Shivakumaran, S. & Takamatsu, S. & Yoshida, N., 2014. "How survey-to-survey imputation can fail," Policy Research Working Paper Series 6961, The World Bank.
    11. Carlo Azzarri & Elizabeth Cross, 2016. "Improved Spatially Disaggregated Livestock Measures for Uganda," The Review of Regional Studies, Southern Regional Science Association, vol. 46(1), pages 37-73, Winter.
    12. Hassine, Nadia Belhaj, 2014. "Economic inequality in the Arab region," Policy Research Working Paper Series 6911, The World Bank.
    13. World Bank, 2015. "Tanzania Poverty Assessment," World Bank Other Operational Studies 21871, The World Bank.

    More about this item

    Keywords

    Rural Poverty Reduction; Regional Economic Development; Debt Markets; Achieving Shared Growth;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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