Estimating Poverty Transitions from Repeated Cross-Sections: A Statistical Perspective

Riccardo D’Alberto (), Silvia De Nicolò () and Aldo Gardini ()
Additional contact information
Riccardo D’Alberto: University of Verona
Silvia De Nicolò: University of Bologna
Aldo Gardini: University of Bologna

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2025, vol. 179, issue 3, No 1, 1143-1164

Abstract: Abstract Studying poverty transitions is challenging due to the limited availability of longitudinal data, leading to a growing interest in methods that estimate transition probabilities via cross-sectional data. These approaches can be grouped into two main strands: a parametric approach, which assumes a distributional model for income and leverages econometric techniques on pseudo-panels, and a semi-parametric approach, which employs matching procedures to construct synthetic panels. A critical step in both methodologies is estimating income correlation across time that is not directly available from cross-sectional data. Although these methods are popular in the economics literature, to the best of our knowledge, they have not been systematically reviewed or assessed from a statistical perspective. In this paper, we examine these methods and their limitations before proposing a novel scenario-based framework with two alternative approaches, each aligned with a distinct strand of literature. Specifically, the parametric proposal incorporates Bayesian models that use scenarios as prior information for income autocorrelation, while the semi-parametric approach is based on a matching-based procedure. The latter includes a tuning parameter that adjusts the number of neighbors to regulate autocorrelation. Finally, we evaluate and compare the discussed methods, including our newly proposed ones, through a Monte Carlo simulation study based on Italian EU-SILC data.

Keywords: Bayesian inference; Matching; Pseudo-panel; Synthetic panels (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11205-025-03645-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:soinre:v:179:y:2025:i:3:d:10.1007_s11205-025-03645-3

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11135

DOI: 10.1007/s11205-025-03645-3

Access Statistics for this article

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement is currently edited by Filomena Maggino

More articles in Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().