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THE ESTIMATION OF POVERTY DYNAMICS USING DIFFERENT MEASUREMENTS OF HOUSEHOLD INCOME
Author(s) -
Rendtel Ulrich,
Langeheine Rolf,
Berntsen Roland
Publication year - 1998
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1998.tb00253.x
Subject(s) - economics , estimation , poverty , econometrics , dynamics (music) , household income , measuring poverty , demographic economics , economic growth , geography , sociology , management , archaeology , pedagogy
If surveys offer two different measurements of household income, one can use them simultaneously to identify the potential effects of measurement error on the observed‐income mobility of the poor. In this paper we investigate transition tables between subsequent income states. Latent Markov models are used to model incorrect classifications of income states. Misclassifications are interpreted as measurement error or spurious changes that are not consistent with a simple transition table model. The empirical results for the German Socio‐Economic Panel (GSOEP) show that the observed transition tables overestimate the mobility between poverty states.