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Brazil within Brazil: testing the poverty map methodology in Minas Gerais

Chris Elbers (), Peter Lanjouw () and Phillippe George Leite

No 4513, Policy Research Working Paper Series from The World Bank

Abstract: The small-area estimation technique developed for producing poverty maps has been applied in a large number of developing countries. Opportunities to formally test the validity of this approach remain rare due to lack of appropriately detailed data. This paper compares a set of predicted welfare estimates based on this methodology against their true values, in a setting where these true values are known. A recent study draws on Monte Carlo evidence to warn that the small-area estimation methodology could significantly over-state the precision of local-level estimates of poverty, if underlying assumptions of spatial homogeneity do not hold. Despite these concerns, the findings in this paper for the state of Minas Gerais, Brazil, indicate that the small-area estimation approach is able to produce estimates of welfare that line up quite closely to their true values. Although the setting considered here would seem, a priori, unlikely to meet the homogeneity conditions that have been argued to be essential for the method, confidence intervals for the poverty estimates also appear to be appropriate. However, this latter conclusion holds only after carefully controlling for community-level factors that are correlated with household level welfare.

Keywords: Statistical&Mathematical Sciences; Population Policies; Science Education; Scientific Research&Science Parks; Small Area Estimation Poverty Mapping (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-ecm
Date: 2008-02-01
References: View complete reference list from CitEc
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