Estimating Income Poverty in the Presence of Missing Data and Measurement Error

33 Pages Posted: 10 Jan 2010

See all articles by Cheti Nicoletti

Cheti Nicoletti

University of York - Department of Economics and Related Studies

Franco Peracchi

University of Rome Tor Vergata - Department of Economics and Finance; University of Rome Tor Vergata - Centre for International Studies on Economic Growth (CEIS); EIEF

Francesca Foliano

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: December 2009

Abstract

Reliable measures of poverty are an essential statistical tool for public policies aimed at reducing poverty. In this paper we consider the reliability of income poverty measures based on survey data which are typically plagued by missing data and measurement error. Neglecting these problems can bias the estimated poverty rates. We show how to derive upper and lower bounds for the population poverty rate using the sample evidence, an upper bound on the probability of misclassifying people into poor and non-poor, and instrumental or monotone instrumental variable assumptions. By using the European Community Household Panel, we compute bounds for the poverty rate in ten European countries and study the sensitivity of poverty comparisons across countries to missing data and measurement error problems. Supplemental materials for this article may be downloaded from the JBES website.

Keywords: Misclassification error, Survey non-response, Partial identification

Suggested Citation

Nicoletti, Cheti and Peracchi, Franco and Foliano, Francesca, Estimating Income Poverty in the Presence of Missing Data and Measurement Error (December 2009). SOEPpaper No. 252, Available at SSRN: https://ssrn.com/abstract=1533370 or http://dx.doi.org/10.2139/ssrn.1533370

Cheti Nicoletti (Contact Author)

University of York - Department of Economics and Related Studies ( email )

Heslington
York, YO1 5DD
United Kingdom

Franco Peracchi

University of Rome Tor Vergata - Department of Economics and Finance ( email )

Via di Tor Vergata
Rome, Lazio 00133
Italy

University of Rome Tor Vergata - Centre for International Studies on Economic Growth (CEIS) ( email )

Via Columbia, 2
Rome, I-00133
Italy

EIEF ( email )

via Sallustiana 62
Rome, 00187
Italy

Francesca Foliano

affiliation not provided to SSRN ( email )

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