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

Author Info

  • 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.

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File URL: http://128.118.178.162/eps/lab/papers/0502/0502007.pdf
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Paper provided by EconWPA in its series Labor and Demography with number 0502007.

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Length: 47 pages
Date of creation: 23 Feb 2005
Date of revision:
Handle: RePEc:wpa:wuwpla:0502007
Note: Type of Document - pdf; pages: 47
Contact details of provider: Web page: http://128.118.178.162

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

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Find related papers by 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

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  6. 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.
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  17. 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.
  18. Kurosaki, Takashi, 2003. "Measurement of Chronic and Transient Poverty: Theory and Application to Pakistan," Discussion Paper Series a436, Institute of Economic Research, Hitotsubashi University.
  19. Jalan, Jyotsna & Ravallion, Martin, 1998. "Transient Poverty in Postreform Rural China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 338-357, June.
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Cited by:

  1. Grimm, Michael & Gräb, Johannes, 2007. "Robust Multiperiod Poverty Comparisons," Proceedings of the German Development Economics Conference, Göttingen 2007 8, Verein für Socialpolitik, Research Committee Development Economics.
  2. Michael Hoy & Buhong Zheng, 2008. "Measuring Lifetime Poverty," Working Papers 0814, University of Guelph, Department of Economics and Finance.
  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.

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