 How Precisely Can We Estimate Vulnerability to Poverty?Yuan Zhang and Guanghua Wan Oxford Development Studies, 2009, vol. 37, issue 3, 277-287 Abstract: There are alternative definitions of vulnerability to poverty. Most researchers prefer to define vulnerability to poverty as the probability of a household or individual falling into poverty in the future. Based on this definition and using household survey panel data from rural China, this paper attempts to assess the extent to which we can measure vulnerability to poverty. The assessment is based on comparisons between estimated vulnerability and actually observed poverty. The authors find that the precision of estimation, first, varies depending on the vulnerability line; their results suggest setting the line at 50% in order to improve predictive power. Second, precision depends on how permanent income is estimated. Assuming log-normal distribution of future income, it is preferable to use past weighted average income as an estimate of permanent income rather than using regressions to gauge permanent income. Third, estimation precision depends on the chosen poverty line. The percentage of overlap between households estimated to be vulnerable and those actually poor rises when a higher poverty line of US$2 is used instead of US$1. Date: 2009 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:oxdevs:v:37:y:2009:i:3:p:277-287 Ordering information: This journal article can be ordered from DOI: 10.1080/13600810903094471 Access Statistics for this article Oxford Development Studies is currently edited by Jo Boyce and Frances Stewart More articles in Oxford Development Studies from Taylor & Francis Journals |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.