Poverty and Permanent Income: A Methodology for Cross-Section Data

Ramses H. Abul Naga and Enrico Bolzani

Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) from Université de Lausanne, Faculté des HEC, DEEP

Abstract: If the set of households which are income poor does not fully overlap with the set of the consumption poor, it could well be that income and consumption expenditure convey different information regarding an unobserved variable on the basis of which families allocate their resources intertemporally. This paper presents a methodology for predicting the unobserved permanent incomes of households using multiple welfare indicators typically available in cross-section data. The methods are illustrated using data from the Swiss Consumption Survey of 1990.

Keywords: poverty; permanent income; latent variables; prediction; Switzerland (search for similar items in EconPapers)
JEL-codes: C2 C3 D6 I3 (search for similar items in EconPapers)
Date: 2000-11
View list of references View citations in EconPapers

Forthcoming in Multidimensional Approaches to Poverty Measurement : Theory and Applications, Deutsch, J. and Silber, J. (eds), Edward Elgar, London

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Persistent link: http://EconPapers.repec.org/RePEc:lau:crdeep:00.26

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