Chronic and Transient Poverty: Measurement and Estimation, with Evidence from China

CIRPEE Working Paper No. 06-11

IZA Discussion Paper No. 2078

42 Pages Posted: 7 Apr 2006

See all articles by Jean-Yves Duclos

Jean-Yves Duclos

Laval University; IZA Institute of Labor Economics

Abdelkrim Araar

Université Laval - Département d'Économique

John Giles

World Bank; IZA Institute of Labor Economics; World Bank - Development Research Group (DECRG)

Date Written: April 2006

Abstract

The paper contributes to the measurement of poverty and vulnerability in three ways. First, we propose a new approach to separating poverty into chronic and transient components. Second, we provide corrections for the statistical biases introduced when using a small number of periods to estimate the importance of vulnerability and transient poverty. Third, we apply these tools to the measurement of chronic and transient poverty in China using a rich panel data set that extends over approximately 17 years. We find that alternative measurement techniques yield significantly different estimates of the relative importance of chronic and transient poverty, and that precision of estimates is enhanced with simple statistical corrections.

Keywords: Poverty dynamics, Transient poverty, Chronic poverty, Permanent poverty, China

JEL Classification: C15, D31, D63, I32

Suggested Citation

Duclos, Jean-Yves and Araar, Abdelkrim and Giles, John, Chronic and Transient Poverty: Measurement and Estimation, with Evidence from China (April 2006). CIRPEE Working Paper No. 06-11, IZA Discussion Paper No. 2078, Available at SSRN: https://ssrn.com/abstract=895181 or http://dx.doi.org/10.2139/ssrn.895181

Jean-Yves Duclos (Contact Author)

Laval University ( email )

Quebec G1K 7P4
Canada
418-656-7096 (Phone)
418-656-9727 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Abdelkrim Araar

Université Laval - Département d'Économique ( email )

CREFA
Ste-Foy, Quebec 179Que G1K
Canada

John Giles

World Bank ( email )

Washington DC
United States

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

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