Identifying the Poor: A Multiple Indicator Approach Ramses M Abul ...
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Identifying the Poor: A Multiple Indicator Approach Ramses M Abul ...
London School of Economics and Political Science. The Toyota Centre. Suntory and Toyota International Centres for. Economics and Related Disciplines.
Identifying the Poor: A Multiple Indicator Approach Ramses M Abul Naga London School of Economics and Political Science
Discussion Paper No.DARP/9 June 1994
The Toyota Centre Suntory and Toyota International Centres for Economics and Related Disciplines London School of Economics and Political Science Houghton Street London WC2A 2AE Tel.: 020-7955 6678
I am grateful for advice from Tony Atkinson, Frank Cowell, Steve Howes, Georg Inderst, Magda Mercader and Dirk van de Gaer.
Abstract The standard approach to the study of poverty assumes the existence of an ideal variable that captures the extent of deprivation. In this paper we postulate that poverty is involved with many dimensions. We use a latent variable framework to predict the extent of an individual's hardship as a function of ψi=ax1i+bx2i +…, where the x's are indicators of I's income status, yi, and latter variable is not observed.
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