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How valid are synthetic panel estimates of poverty dynamics?

Author

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  • Nicolas Hérault

    (University of Melbourne, Australia)

  • Stephen P. Jenkins

    (LSE)

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, Lanjouw, Luoto, and McKenzie (Journal of Development Economics, 2014) providing bounds estimates and the innovative refinement proposed by Dang and Lanjouw (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. Overall, we are more agnostic about the validity of the synthetic panel approach applied to these two rich countries than are earlier validity studies in their applications focusing on middle- and low-income countries.

Suggested Citation

  • Nicolas Hérault & Stephen P. Jenkins, 2018. "How valid are synthetic panel estimates of poverty dynamics?," Working Papers 465, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2018-465
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2018-465.pdf
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    References listed on IDEAS

    as
    1. Joachim R. Frick & Stephen P. Jenkins & Dean R. Lillard & Oliver Lipps & Mark Wooden, 2007. "European Data Watch: The Cross-National Equivalent File (CNEF) and its Member Country Household Panel Studies," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(4), pages 627-654.
    2. Jenkins, Stephen P., 2011. "Changing Fortunes: Income Mobility and Poverty Dynamics in Britain," OUP Catalogue, Oxford University Press, number 9780199226436.
    3. repec:ese:ukhlsp:2015-16 is not listed on IDEAS
    4. Hai-Anh H. Dang & Peter F. Lanjouw, 2018. "Poverty Dynamics in India between 2004 and 2012: Insights from Longitudinal Analysis Using Synthetic Panel Data," Economic Development and Cultural Change, University of Chicago Press, vol. 67(1), pages 131-170.
    5. Hai‐Anh H. Dang & Elena Ianchovichina, 2018. "Welfare Dynamics With Synthetic Panels: The Case of the Arab World In Transition," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(s1), pages 114-144, October.
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    12. Guillermo Cruces & Peter Lanjouw & Leonardo Lucchetti & Elizaveta Perova & Renos Vakis & Mariana Viollaz, 2015. "Estimating poverty transitions using repeated cross-sections: a three-country validation exercise," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(2), pages 161-179, June.
    13. Moffitt, Robert, 1993. "Identification and estimation of dynamic models with a time series of repeated cross-sections," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 99-123, September.
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    16. Hai-Anh H. Dang & Andrew L. Dabalen, 2019. "Is Poverty in Africa Mostly Chronic or Transient? Evidence from Synthetic Panel Data," Journal of Development Studies, Taylor & Francis Journals, vol. 55(7), pages 1527-1547, July.
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    18. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
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    20. Perez, Victor, 2015. "Moving in and out of poverty in Mexico: What can we learn from pseudo-panel methods?," ISER Working Paper Series 2015-16, Institute for Social and Economic Research.
    21. Frick, Joachim R. & Jenkings, Stephen P. & Lillard, Dean R. & Lipps, Oliver & Wooden, Mark, 2007. "The Cross-National Equivalent File (CNEF) and Its Member Country Household Panel Studies," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 127(4), pages 627-654.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. How Valid are Synthetic Panel Estimates of Poverty Dynamics?
      by maximorossi in NEP-LTV blog on 2019-04-29 14:02:10

    Citations

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    Cited by:

    1. Federica Alfani & Fabio Clementi & Michele Fabiani & Vasco Molini & Enzo Valentini, 2023. "Once NEET, always NEET? A synthetic panel approach to analyze the Moroccan labor market," Review of Development Economics, Wiley Blackwell, vol. 27(4), pages 2401-2437, November.
    2. Hai‐Anh H. Dang & Peter F. Lanjouw, 2023. "Measuring Poverty Dynamics with Synthetic Panels Based on Repeated Cross Sections," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 85(3), pages 599-622, June.
    3. Jehovaness Aikaeli & David Garcés‐Urzainqui & Kenneth Mdadila, 2021. "Understanding poverty dynamics and vulnerability in Tanzania: 2012–2018," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 1869-1894, November.
    4. Hai‐Anh Dang & Peter Lanjouw & Elise Vrijburg, 2021. "Poverty in India in the face of Covid‐19: Diagnosis and prospects," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 1816-1837, November.
    5. Himanshu & Peter Lanjouw, 2020. "Income mobility in the developing world: Recent approaches and evidence," WIDER Working Paper Series wp-2020-7, World Institute for Development Economic Research (UNU-WIDER).
    6. Lanjouw Peter, 2020. "Income mobility in the developing world: Recent approaches and evidence," WIDER Working Paper Series wp2020-7, World Institute for Development Economic Research (UNU-WIDER).
    7. Brian Colgan, 2023. "EU-SILC and the potential for synthetic panel estimates," Empirical Economics, Springer, vol. 64(3), pages 1247-1280, March.
    8. Dang, Hai-Anh H & Lanjouw, Peter F., 2021. "Data Scarcity and Poverty Measurement," IZA Discussion Papers 14631, Institute of Labor Economics (IZA).
    9. Vincenzo Salvucci & Finn Tarp, 2021. "Poverty and vulnerability in Mozambique: An analysis of dynamics and correlates in light of the Covid‐19 crisis using synthetic panels," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 1895-1918, November.
    10. Roger Wilkins, 2021. "Economic Wellbeing," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 469-481, December.
    11. Hai-Anh H. Dang & Peter F. Lanjouw, 2023. "Regression-based imputation for poverty measurement in data-scarce settings," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 13, pages 141-150, Edward Elgar Publishing.
    12. Kimberly Bolch & Luis F. Lopez‐Calva & Eduardo Ortiz‐Juarez, 2023. "“When Life Gives You Lemons”: Using Cross‐Sectional Surveys to Identify Chronic Poverty in the Absence of Panel Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(2), pages 474-503, June.
    13. Alessio Fusco & Philippe Van Kerm, 2023. "Measuring poverty persistence," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 18, pages 192-200, Edward Elgar Publishing.
    14. Rongen,Gerton & Binti Ali Ahmad,Zainab & Lanjouw,Peter F. & Simler,Kenneth, 2022. "The Interplay of Regional and Ethnic Inequalities in Malaysian Poverty Dynamics," Policy Research Working Paper Series 9898, The World Bank.
    15. David Garcés‐Urzainqui & Peter Lanjouw & Gerton Rongen, 2021. "Constructing synthetic panels for the purpose of studying poverty dynamics: A primer," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 1803-1815, November.

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    More about this item

    Keywords

    synthetic panel; pseudo panel; poverty dynamics; poverty entry; poverty exit; BHPS; HILDA.;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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