Chronic and Transient Poverty in Argentina: Measurement and Determinants

SANTOS, MARÍA EMMA

Bahia Blanca

Congreso; III Congreso Nacional de Estudiantes de Posgrado en Economia; 2007

Universidad Nacional del Sur

In this paper we discuss the measurement of chronic and transient poverty and estimate a new class of chronic poverty measures proposed by Foster and  Santos (2006) using panel data from urban Argentina for the period 1995 to 2003. We consider that this measure is better than others previously used in that it makes explicit the assumption on the degree of income substitutability across periods of time through the value assumed for a parameter â, and in that it is sensitive not only to income inequality across people but also to income inequality over time (the lower the value of Beta, the higher the aversion to inequality). We also estimate the transient poverty counterpart and overall inter-temporal poverty. We find in the first place, that inter-temporal poverty has an increasing trend over the study period with significant and unambiguous increases between 1995 and 1999, 1999 and 2000, and 2000 and 2001. Secondly, we find that most part of inter-temporal poverty is actually chronic poverty. It was the substantial increase in chronic poverty what led to the increase in overall poverty. The rest of the paper is devoted to analyze chronic and transient poverty determinants using a multinomial logit model. Contrary to what argued by previous papers, we find that the determinants of each of the two types of poverty are not qualitatively different but just differ in the magnitude of the impact.