But … What is the Poverty Rate Today? : Testing Poverty Nowcasting Methods in Latin America and the Caribbean
Poverty estimates usually lag behind two years, which makes it difficult to provide real-time poverty analysis to assess the impact of economic crisis and shocks among the less well-off, and subsequently limits policy responses. This paper takes ad...
| Main Authors: | , , , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/898691497881586394/But-what-is-the-poverty-rate-today-testing-poverty-nowcasting-methods-in-Latin-America-and-the-Caribbean http://hdl.handle.net/10986/27304 |
| Summary: | Poverty estimates usually lag behind two
years, which makes it difficult to provide real-time poverty
analysis to assess the impact of economic crisis and shocks
among the less well-off, and subsequently limits policy
responses. This paper takes advantage of up-to-date average
economic welfare indicators like the gross domestic product
per capita and comprehensive harmonized micro data of more
than 180 household surveys in 15 Latin American countries.
The paper tests three commonly used poverty nowcasting
methods and ranks their performance by comparing
country-specific and regional poverty nowcasts with actual
poverty estimates for 2003–14 period. The validation results
show that the two bottom-up approaches, which simulate the
performance of each agent in the economy to nowcast overall
poverty, perform relatively better than the top-down
approach, which uses welfare estimates to explain the
performance of poverty at an aggregate level over time. The
results are robust to additional sensitivity and robustness tests. |
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