Robustness of Shared Prosperity Estimates [electronic resource] : How Different Methodological Choices Matter / Aziz Atamanov.

By: Atamanov, AzizContributor(s): Atamanov, Aziz | Azevedo, Joao Pedro Wagner De | Dewina, Reno | Nguyen, Minh Cong | Uematsu, Hiroki | Wieser, Christina | Yoshida, NobuoMaterial type: TextTextPublication details: Washington, D.C. : The World Bank, 2016Description: 1 online resource (28 p.)Subject(s): Economic Theory and Research | Inequality | Macroeconomics and Economic Growth | Poverty Reduction | Pro-Poor Growth | Robustness Tests | Rural Poverty Reduction | Shared ProsperityAdditional physical formats: Atamanov, Aziz.: Robustness of Shared Prosperity Estimates : How Different Methodological Choices Matter.Online resources: Click here to access online Abstract: This paper is the first to systematically test the robustness of shared prosperity estimates to different methodological choices using a sample of countries from all regions in the world. The tests that are conducted include grouped versus microdata, nominal welfare aggregate versus adjustment for spatial price variation, and different treatment of income with negative and zero values. The empirical results reveal an only minimal impact of the proposed tests on shared prosperity estimates. Nevertheless, there are important caveats. First, spatial adjustment can change the ranking of households, affecting the distribution of the population in the bottom 40 percent. Second, the negligible impact of spatial eflation holds only if price adjustments are carried out consistently over time. Finally, the treatment of negative and zero income numbers can potentially lead to substantial ifferences in shared prosperity, depending on the magnitude of negative income and the share of households with negative and zero numbers across years.
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This paper is the first to systematically test the robustness of shared prosperity estimates to different methodological choices using a sample of countries from all regions in the world. The tests that are conducted include grouped versus microdata, nominal welfare aggregate versus adjustment for spatial price variation, and different treatment of income with negative and zero values. The empirical results reveal an only minimal impact of the proposed tests on shared prosperity estimates. Nevertheless, there are important caveats. First, spatial adjustment can change the ranking of households, affecting the distribution of the population in the bottom 40 percent. Second, the negligible impact of spatial eflation holds only if price adjustments are carried out consistently over time. Finally, the treatment of negative and zero income numbers can potentially lead to substantial ifferences in shared prosperity, depending on the magnitude of negative income and the share of households with negative and zero numbers across years.

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