Risk-adjusted poverty in Argentina: measurement and determinants

1 Nov 2006 | Publication

Work area(s)

Social development Statistics Economic development

Topic(s)

Income distribution Poverty

Risk-adjusted poverty in Argentina: measurement and determinants

  • Publication type: Serie Financing for Development
  • Publication corporate author (Institutional author): NU. CEPAL. División de Desarrollo Económico
  • Physical description: 39 páginas.
  • Publisher: ECLAC
  • UN symbol (Signature): LC/L.2589-P
  • Date: November, 2006
  • ISBN: 9211216079

Abstract

Abstract This paper presents a methodology for adjusting measures of income and poverty for the risk faced by a household. The approach draws on the standard economic concept of risk aversion, and it is based on the intuition that households will prefer a steady stream of income to a variable one with the same mean. Relying on a Constant Relative Risk Aversion utility function, we use panel data for Argentina to compute risk-adjusted income and poverty measures. At the aggregate level, we find that taking risk into account substantially increases the poverty headcount. Moreover, a regression analysis suggests that many household characteristics are correlated not only with the average income of the household over time, but also with its variability.

Country(ies)

  • Argentina
  • Argentina

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