Estimation of income poverty in the presence of measurement errors and missing data problems

TY - JOUR

T1 - Estimation of income poverty in the presence of measurement errors and missing data problems

AU - Nicoletti, Cheti

AU - Peracchi, Franco

AU - Foliano, Francesca

PY - 2011/1/1

Y1 - 2011/1/1

N2 - Reliable measures of poverty are an essential statistical tool for public policies aimed at reducing poverty. In this article we consider the reliability of income poverty measures based on survey data which are typically plagued by missing data and measurement error. Neglecting these problems can bias the estimated poverty rates. We show how to derive upper and lower bounds for the population poverty rate using the sample evidence, an upper bound on the probability of misclassifying people into poor and nonpoor, and instrumental or monotone instrumental variable assumptions. By using the European Community Household Panel, we compute bounds for the poverty rate in 10 European countries and study the sensitivity of poverty comparisons across countries to missing data and measurement error problems.

AB - Reliable measures of poverty are an essential statistical tool for public policies aimed at reducing poverty. In this article we consider the reliability of income poverty measures based on survey data which are typically plagued by missing data and measurement error. Neglecting these problems can bias the estimated poverty rates. We show how to derive upper and lower bounds for the population poverty rate using the sample evidence, an upper bound on the probability of misclassifying people into poor and nonpoor, and instrumental or monotone instrumental variable assumptions. By using the European Community Household Panel, we compute bounds for the poverty rate in 10 European countries and study the sensitivity of poverty comparisons across countries to missing data and measurement error problems.

KW - Misclassification error

KW - Partial identification

KW - Survey nonresponse

UR - http://www.scopus.com/inward/record.url?scp=78449241299&partnerID=8YFLogxK

U2 - 10.1198/jbes.2010.07185

DO - 10.1198/jbes.2010.07185

M3 - Article

SN - 0735-0015

VL - 29

SP - 61

EP - 72

JO - Journal of Business and Economic Statistics

JF - Journal of Business and Economic Statistics

IS - 1

ER -