Using Repeated Cross-Sections to Explore Movements Into and Out of Poverty

Published in: Journal of Development Economics, v. 107, Mar. 2014, p. 112–128

Posted on RAND.org on March 01, 2014

by Hai-Anh Dang, Peter Lanjouw, Jill Luoto, David McKenzie

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Movements in and out of poverty are of core interest to both policymakers and economists. Yet the panel data needed to analyze such movements are rare. In this paper we build on the methodology used to construct poverty maps to show how repeated cross-sections of household survey data can allow inferences to be made about movements in and out of poverty. We illustrate that the method permits the estimation of bounds on mobility, and provide non-parametric and parametric approaches to obtaining these bounds. We test how well the method works on data sets for Vietnam and Indonesia where we are able to compare our method to true panel estimates. Our results are sufficiently encouraging to offer the prospect of some insights into mobility and poverty duration in settings where historically it was judged that the data necessary for such analysis were unavailable.

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