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 a...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/08/5108019/estimating-individual-vulnerability-poverty-pseudo-panel-data http://hdl.handle.net/10986/14150 |
| Summary: | 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. |
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