How Valid are Synthetic Panel Estimates of Poverty Dynamics?

186 Pages Posted: 2 May 2018

See all articles by Nicolas Herault

Nicolas Herault

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Stephen P. Jenkins

London School of Economics & Political Science (LSE) - Department of Social Policy and Administration; Institute for the Study of Labor (IZA); University of Essex - Institute for Social and Economic Research (ISER)

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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.

Keywords: poverty exit, poverty entry, poverty dynamics, pseudo panel, synthetic panel, BHPS, HILDA

JEL Classification: I32, D31, C52

Suggested Citation

Herault, Nicolas and Jenkins, Stephen P., How Valid are Synthetic Panel Estimates of Poverty Dynamics?. IZA Discussion Paper No. 11484, Available at SSRN: https://ssrn.com/abstract=3170273

Nicolas Herault (Contact Author)

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

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Australia

HOME PAGE: http://www.findanexpert.unimelb.edu.au/researcher/person125238.html

Stephen P. Jenkins

London School of Economics & Political Science (LSE) - Department of Social Policy and Administration ( email )

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London, England WC2A 2AE
United Kingdom

Institute for the Study of Labor (IZA)

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Germany

University of Essex - Institute for Social and Economic Research (ISER) ( email )

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United Kingdom
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+44 120 687 3151 (Fax)

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