“When life gives you lemons”: Identifying persistent poverty with cross-sectional data

What is it about?

Identifying chronic poverty is critical for any poverty eradication strategy. But what if you only have cross-sectional data? How can you identify the chronicity of poverty? Here is an idea, an alternative approach useful in data constrained contexts.

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Photo by Feifei Peng on Unsplash

Photo by Feifei Peng on Unsplash

Why is it important?

If the goal of policies is to bring an end to that poverty that is persistent over time, they should ensure that even if people enter poverty due to a temporary loss of income, they do not stay in poverty. Measuring and monitoring persistent poverty, however, requires longitudinal data, which is scarce. In its absence, this paper offers an alternative approach based on one single round of cross-sectional data.