How valid are synthetic panel estimates of poverty dynamics?

Nicolas Hérault and Stephen Jenkins

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: A growing literature uses repeated cross-section surveys to derive ‘synthetic panel’ data estimates of poverty dynamics statistics. It builds on the pioneering study by Dang et al. (‘DLLM’, Journal of Development Economics, 2014) providing bounds estimates and the innovative refinement proposed by Dang and Lanjouw (‘DL’, World Bank Policy Research Working Paper 6504, 2013) providing point estimates of the statistics of interest. We provide new evidence about the accuracy of synthetic panel estimates relative to benchmarks based on estimates derived from genuine household panel data, employing high quality data from Australia and Britain, while also examining the sensitivity of results to a number of analytical choices. For these two high-income countries we show that DL-method point estimates are distinctly less accurate than estimates derived in earlier validity studies, all of which focus on low- and middle-income countries. We also demonstrate that estimate validity depends on choices such as the age of the household head (defining the sample), the poverty line level, and the years analyzed. DLLM parametric bounds estimates virtually always include the true panel estimates, though the bounds can be wide.

Keywords: synthetic panel; pseudo panel; poverty dynamics; poverty entry; poverty exit; BHPS; HILDA (search for similar items in EconPapers)
JEL-codes: C52 D31 I32 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2019-04-25
New Economics Papers: this item is included in nep-gen and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Published in Journal of Economic Inequality, 25, April, 2019, 17(1), pp. 51-76. ISSN: 1569-1721

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http://eprints.lse.ac.uk/100043/ Open access version. (application/pdf)

Related works:
Journal Article: How valid are synthetic panel estimates of poverty dynamics? (2019)
Journal Article: How valid are synthetic panel estimates of poverty dynamics? (2019)
Working Paper: How valid are synthetic panel estimates of poverty dynamics? (2018)
Working Paper: How Valid are Synthetic Panel Estimates of Poverty Dynamics? (2018)
Working Paper: How valid are synthetic panel estimates of poverty dynamics? (2018)
Working Paper: How Valid Are Synthetic Panel Estimates of Poverty Dynamics? (2018)
Working Paper: How valid are synthetic panel estimates of poverty dynamics? (2018)
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