Assessing Ex Ante the Poverty and Distributional Impact of the Global Crisis in a Developing Country : A Micro-simulation Approach with Application to Bangladesh

Measuring the poverty and distributional impact of the global crisis for developing countries is not easy, given the multiple channels of impact and the limited availability of real-time data. Commonly-used approaches are of limited use in addressi...

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Bibliographic Details
Main Authors:	Habib, Bilal, Narayan, Ambar, Olivieri, Sergio, Sanchez-Paramo, Carolina
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ABSOLUTE TERMS ADVERSE IMPACT AGGREGATE INCOME AGGREGATE POVERTY AGRICULTURAL EMPLOYMENT AGRICULTURAL GROWTH AGRICULTURAL SECTOR AGRICULTURAL SECTORS AGRICULTURAL WAGE AGRICULTURAL WORKERS AGRICULTURE AVERAGE GROWTH AVERAGE HOUSEHOLD INCOME AVERAGE INCOME BASE YEAR BASIC FOOD BASKET BENCHMARK CHANGES IN POVERTY CONSUMER PRICE INDEX CONSUMPTION DATA CONSUMPTION GROWTH CONSUMPTION LEVELS COPING STRATEGY COUNTERFACTUAL COUNTRY CASE DAILY WAGE DATA AVAILABILITY DECLINE IN POVERTY DEFLATORS DEVELOPING COUNTRIES DEVELOPING COUNTRY DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL IMPACT DOMESTIC CREDIT DOMESTIC PRICES ECONOMETRIC MODELS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC LITERATURE EDUCATIONAL ATTAINMENT ELASTICITY EMPIRICAL MODELS EMPLOYMENT OPPORTUNITIES EMPLOYMENT STATUS ERROR TERMS EXCHANGE RATE EXCHANGE RATES EXPORTS EXTREME POVERTY FINANCIAL CRISIS FISCAL POLICIES FOOD BASKET FOOD INTAKE FOOD ITEMS FOOD NEEDS FOOD PRICE FOOD PRICES GINI INDEX GLOBAL MARKETS GLOBAL POVERTY GROWTH PROJECTIONS GROWTH RATE GROWTH RATES HIGH GROWTH HIGH POVERTY HOUSEHOLD DATA HOUSEHOLD HEADS HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SIZE HOUSEHOLD SURVEY IMPACT ON POVERTY IMPACT ON POVERTY REDUCTION INCOME INCOME BY REGION INCOME DATA INCOME DISTRIBUTION INCOME GROUPS INCOME LEVELS INCOME POVERTY INCOME SHOCK INDUSTRIALIZATION INDUSTRIALIZED COUNTRIES INEQUALITY INEQUALITY FALLS INEQUALITY MEASURES LABOR FORCE LABOR MARKET LAND OWNERSHIP MACROECONOMIC ENVIRONMENT MACROECONOMIC SHOCKS MICRO DATA NATIONAL POVERTY NATURAL DISASTERS NEGATIVE IMPACT NOMINAL INCOME OUTPUT GROWTH PER CAPITA CONSUMPTION PER CAPITA EXPENDITURE PER CAPITA INCOME PER CAPITA INCOMES POLICY RESEARCH POOR POOR HOUSEHOLDS POOR INDIVIDUALS POOR PEOPLE POOR RURAL HOUSEHOLDS POVERTY ASSESSMENT POVERTY ESTIMATES POVERTY GAP POVERTY HEADCOUNT RATE POVERTY HEADCOUNT RATES POVERTY IMPACT POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY RATE POVERTY RATES POVERTY REDUCTION PUBLIC EMPLOYMENT PUBLIC SECTOR PURCHASING POWER RAPID GROWTH REAL GDP REGIONAL DIFFERENCES RELATIVE IMPORTANCE RELATIVE INEQUALITY RELATIVE PRICES RURAL RURAL AREAS RURAL COUNTERPARTS RURAL POPULATION SAVINGS SKILLED LABOR SOCIAL SECURITY SPATIAL DIFFERENCES SQUARED POVERTY GAP SUBSISTENCE SUBSISTENCE FARMERS UNDERESTIMATES UNEMPLOYMENT UNEMPLOYMENT RATE URBAN AREAS VALUE ADDED WAGE GROWTH WAGES WELFARE IMPACT WELFARE MEASURES
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100316132959 http://hdl.handle.net/10986/3725

Description
Summary:	Measuring the poverty and distributional impact of the global crisis for developing countries is not easy, given the multiple channels of impact and the limited availability of real-time data. Commonly-used approaches are of limited use in addressing questions like who are being affected by the crisis and by how much, and who are vulnerable to falling into poverty if the crisis deepens? This paper develops a simple micro-simulation method, modifying models from existing economic literature, to measure the poverty and distributional impact of macroeconomic shocks by linking macro projections with pre-crisis household data. The approach is then applied to Bangladesh to assess the potential impact of the slowdown on poverty and income distribution across different groups and regions. A validation exercise using past data from Bangladesh finds that the model generates projections that compare well with actual estimates from household data. The results can inform the design of crisis monitoring tools and policies in Bangladesh, and also illustrate the kind of analysis that is possible in other developing countries with similar data availability.

Assessing Ex Ante the Poverty and Distributional Impact of the Global Crisis in a Developing Country : A Micro-simulation Approach with Application to Bangladesh

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