IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpla/0502007.html
   My bibliography  Save this paper

Income Fluctuations, Poverty and Well-Being Over Time: Theory and Application to Argentina

Author

Listed:
  • Guillermo Cruces

    (STICERD & Economics Department, LSE)

Abstract

This paper studies poverty as a dynamic phenomenon, motivated by the recurring economic crises that affect developing countries and the incidence of income fluctuations on household welfare. While the increasing availability of household panel data has been exploited in theoretical analysis and empirical applications, the methodological and applied literatures still lack a unified framework. Echoing Atkinson (1987), this paper addresses the question of how poverty should be measured over time – or, in more general terms, how to measure well- being based on repeated observations of household income. The paper develops and illustrates a set of tools for empirical work based on theoretically sound extensions of the existing methodology for static distributional analysis. Moreover, this framework encompasses some of the existing approaches as special cases. These tools are illustrated with longitudinal data for Argentina in the 1995-2002 period, which is well suited for this type of analysis given the large fluctuations in household income due to the repeated economic crises in the country.

Suggested Citation

  • Guillermo Cruces, 2005. "Income Fluctuations, Poverty and Well-Being Over Time: Theory and Application to Argentina," Labor and Demography 0502007, EconWPA.
    • Handle: RePEc:wpa:wuwpla:0502007
    Note: Type of Document - pdf; pages: 47
    as

    Download full text from publisher

    File URL: http://econwpa.repec.org/eps/lab/papers/0502/0502007.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Peter Gottschalk & Enrico Spolaore, 2002. "On the Evaluation of Economic Mobility," Review of Economic Studies, Oxford University Press, vol. 69(1), pages 191-208.
    2. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
    3. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    4. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Differences in Needs and Assessment of Income Distributions," Bulletin of Economic Research, Wiley Blackwell, vol. 44(2), pages 77-124, April.
    5. Lanjouw, Peter & Ravallion, Martin, 1995. "Poverty and Household Size," Economic Journal, Royal Economic Society, vol. 105(433), pages 1415-1434, November.
    6. Besley, Timothy, 1995. "Savings, credit and insurance," Handbook of Development Economics,in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 36, pages 2123-2207 Elsevier.
    7. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1797-1855, December.
    8. Blackorby, Charles & Donaldson, David, 1987. "Welfare ratios and distributionally sensitive cost-benefit analysis," Journal of Public Economics, Elsevier, vol. 34(3), pages 265-290, December.
    9. Kurosaki, Takashi, 2003. "Measurement of Chronic and Transient Poverty: Theory and Application to Pakistan," Discussion Paper Series a436, Institute of Economic Research, Hitotsubashi University.
    10. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, April.
    11. A. Sandmo, 1970. "The Effect of Uncertainty on Saving Decisions," Review of Economic Studies, Oxford University Press, vol. 37(3), pages 353-360.
    12. Cruces Guillermo & Makdissi Paul & Wodon Quentin T., 2004. "Poverty Measurement Under Risk Aversion Using Panel Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-20, September.
    13. Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-1182, December.
    14. Ethan Ligon & Laura Schechter, 2003. "Measuring Vulnerability," Economic Journal, Royal Economic Society, vol. 113(486), pages 95-102, March.
    15. Dreze, Jacques H. & Modigliani, Franco, 1972. "Consumption decisions under uncertainty," Journal of Economic Theory, Elsevier, vol. 5(3), pages 308-335, December.
    16. Newbery, David M, 1989. "The Theory of Food Price Stabilisation," Economic Journal, Royal Economic Society, vol. 99(398), pages 1065-1082, December.
    17. Milne, Frank & Shefrin, H M, 1988. "Ex Post Efficiency and Ex Post Welfare: Some Fundamental Considerations," Economica, London School of Economics and Political Science, vol. 55(217), pages 63-79, February.
    18. Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, vol. 56, pages 279-279.
    19. Sebastian Galiani & Daniel Heymann & Mariano Tommasi, 2003. "Great Expectations and Hard Times: The Argentine Convertibility Plan," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Spring 20), pages 109-160, January.
    20. Hammond, Peter J., 1975. "A note on extreme inequality aversion," Journal of Economic Theory, Elsevier, vol. 11(3), pages 465-467, December.
    21. Jalan, Jyotsna & Ravallion, Martin, 1998. "Transient Poverty in Postreform Rural China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 338-357, June.
    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. Johannes Gräb & Michael Grimm, 2007. "Robust Multiperiod Poverty Comparisons," Ibero America Institute for Econ. Research (IAI) Discussion Papers 160, Ibero-America Institute for Economic Research.
    2. Hoy, Michael & Zheng, Buhong, 2011. "Measuring lifetime poverty," Journal of Economic Theory, Elsevier, vol. 146(6), pages 2544-2562.
    3. Nwankwo, Uche M. & Wolfgang, Bokelmann, 2008. "The Effect of Information and Market Access on Adopters' Income Level," 108th Seminar, February 8-9, 2008, Warsaw, Poland 48101, European Association of Agricultural Economists.
    4. Nicholas Rohde & Kam Ki Tang & D.S. Prasada Rao, 2014. "Distributional Characteristics of Income Insecurity in the U.S., Germany, and Britain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 159-176, May.
    5. Michael Savage, 2016. "Poorest Made Poorer? Decomposing income losses at the bottom of the income distribution during the Great Recession," Papers WP528, Economic and Social Research Institute (ESRI).

    More about this item

    Keywords

    Risk; Income Fluctuations; Panel Data; Poverty; Argentina;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:wpa:wuwpla:0502007. 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: (EconWPA). General contact details of provider: http://econwpa.repec.org .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.