Fuzzy Chronic Poverty: A Proposed Response to Measurement Error for Intertemporal Poverty Measurement

25 Pages Posted: 12 Feb 2019

See all articles by Catherine Porter

Catherine Porter

Heriot-Watt University

Gaston Yalonetzky

University of Leeds - Leeds University Business School (LUBS); Leeds University Business School (LUBS) - Division of Economics

Date Written: March 2019

Abstract

A number of chronic poverty measures are now empirically applied to quantify the prevalence and intensity of chronic poverty, vis‐à‐vis transient experiences, using panel data. Welfare trajectories over time are assessed in order to identify the chronically poor and distinguish them from the non‐poor, or the transiently poor, and assess the extent and intensity of intertemporal poverty. We examine the implications of measurement error in the welfare outcome for some popular discontinuous chronic poverty measures, and propose corrections to these measures that seeks to minimize the consequences of measurement error. The approach is based on a novel criterion for the identification of chronic poverty that draws on fuzzy set theory. We illustrate the empirical relevance of the approach with a panel dataset from rural Ethiopia and some simulations.

Keywords: intertemporal poverty, poverty measurement, measurement error, fuzzy sets theory

Suggested Citation

Porter, Catherine and Yalonetzky, Gaston, Fuzzy Chronic Poverty: A Proposed Response to Measurement Error for Intertemporal Poverty Measurement (March 2019). Review of Income and Wealth, Vol. 65, Issue 1, pp. 119-143, 2019. Available at SSRN: https://ssrn.com/abstract=3332591 or http://dx.doi.org/10.1111/roiw.12321

Catherine Porter (Contact Author)

Heriot-Watt University ( email )

Riccarton
Edinburgh EH14 4AS, Scotland EH14 1AS
United Kingdom

Gaston Yalonetzky

University of Leeds - Leeds University Business School (LUBS) ( email )

Leeds LS2 9JT
United Kingdom

Leeds University Business School (LUBS) - Division of Economics ( email )

Leeds LS2 9JT
United Kingdom

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