Estimating Poverty Transitions in Turkey Using Repeated Cross-Sectional Data

Abstract

In order to fight poverty more effectively, it is vital to determine the extent to which households are chronic or transient poor. In this context, this paper has two aims. The first is to estimate poverty transition between 2006 and 2016 in Turkey using a newly developed synthetic panel method. With this method, the transition of poverty between two-time points can be estimated without the need for real panel data. The second aim of the study is to test how well this method works. To this end, the analysis has been performed once again by using real panel data for the years 2006-2009 and 2013-2016. The findings show that the percentage of households those who chronically poor is between 3.9% and 10.7%, the percentage of those who escaped from poverty is between 12.1% and 20.8% and the percentage of those who fall into poverty is between 5.4% and 12.2%. The analysis with actual panel data has revealed that the method works quite well.

Keywords

• cross-sectional data
• poverty
• poverty transition
• synthetic panel
• Turkey

References

1. Acar, A. (2014). The Dynamics of Multidimensional Poverty in Turkey (BETAM Working Paper Series No. 14). Retrieved from https://betam.bahcesehir.edu.tr/2014/10/the-dynamics- of-multidimensional-poverty-in-turkey/
2. Acar, A., & Baslevent, C. (2014). Examination of the Transitions of Households into and out of Poverty in Turkey (BETAM Working Paper Series No. 15). Retrieved from https://betam. bahcesehir.edu.tr/2014/11/examination-of-the-transitions- of-households-into-and-out-of-poverty-in-turkey/
3. Antman, F., & McKenzie, D. J. (2007). Earnings Mobility and Measurement Error: A Pseudo‐Panel Approach. Economic Development and Cultural Change, 56(1), 125–161. https:// doi.org/10.1086/520561
4. Bahce, S., & Kose, A. H. (2017). Social Classes and the Neo-Liberal Poverty Regime in Turkey, 2002–2011. Journal of Contemporary Asia, 47(4), 575–595. https://doi.org/10.10 80/00472336.2017.1325919
5. Bane, M. J., & Ellwood, D. T. (1986). Slipping into and out of Poverty: The Dynamics of Spells. The Journal of Human Resources, 21(1), 1–23. https://doi.org/10.2307/145955
6. Bierbaum, M., & Gassmann, F. (2012). Chronic and Transitory Poverty in the Kyrgyz Republic: What Can Synthetic Panels Tell Us? (UNU-MERIT Working Paper Series No. 64). Retrieved from http://collections.unu.edu/eserv/UNU:425/ wp2012-064.pdf
7. Bugra, A., & Keyder, C. (2005). Poverty and Social Policy in Contemporary Turkey. Retrieved from https://pdfs. semanticscholar.org/0eaf/37807c570d98e1002831f- 265f8316c774769.pdf
8. Cruces, G., Lanjouw, P., Lucchetti, L., Perova, E., Vakis, R., & Viollaz, M. (2015). Estimating poverty transitions using repeated cross-sections: a three-country validation exercise. The Journal of Economic Inequality, 13(2), 161–179. https:// doi.org/10.1007/s10888-014-9284-9

9. Cuesta, J., Ñopo, H., & Pizzolitto, G. (2011). Using pseudo- panels to measure income mobility in Latin America. Review of Income and Wealth, 57(2), 224–246. https://doi. org/10.1111/j.1475-4991.2011.00444.x
10. Dang, H.-A. H., & Dabalen, A. L. (2018). Is Poverty in Africa Mostly Chronic or Transient? Evidence from Synthetic Panel Data. The Journal of Development Studies, 1–21. https://doi.org/ 10.1080/00220388.2017.1417585
11. Dang, H.-A., Lanjouw, P., Luoto, J., & McKenzie, D. (2014). Using repeated cross-sections to explore movements into and out of poverty. Journal of Development Economics, 107, 112–128. https://doi.org/10.1016/j.jdeveco.2013.10.008
12. Dayioglu, M., & Demir Seker, S. (2016). Social Policy and the Dynamics of Early Childhood Poverty in Turkey. Journal of Human Development and Capabilities, 17(4), 540–557. https://doi.org/10.1080/19452829.2016.1225700
13. Deaton, A. (1985). Panel data from time series of cross-sections. Journal of Econometrics, 30(1–2), 109–126. https:// doi.org/10.1016/0304-4076(85)90134-4
14. Foster, J., Greer, J., & Thorbecke, E. (1984). A Class of Decomposable Poverty Measures. Econometrica, 52(3), 761–766. https://doi.org/10.2307/1913475
15. Gibson, J. (2001). Measuring chronic poverty without a panel. Journal of Development Economics, 65(2), 243–266. https:// doi.org/10.1016/S0304-3878(01)00136-5
16. Herault, N., & Jenkins, S. P. (2018). How Valid are Synthetic Panel Estimates of Poverty Dynamics? (Society for the Study of Economic Inequality Working Paper Series No. 465). Retrieved from https://ideas.repec.org/p/inq/inqwps/ ecineq2018-465.html
17. McKenzie, D. (2019). Using Repeated Cross-Sections to Explore Movements into and out of Poverty. Retrieved March 19, 2019, from http://siteresources.worldbank.org/DEC/ Resources/McKenzie_ReplicationFilesforMobility.zip
18. Seker, S. D., & Dayioglu, M. (2015). Poverty Dynamics in Turkey. Review of Income and Wealth, 61(3), 477–493. https://doi. org/10.1111/roiw.12112
19. Sigeze, C., & Sengul, S. (2018). Türkiye’de Yoksulluğun Rassal Etkiler Multinomial Logit Model ile İncelenmesi. Dokuz Eylül Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 20(4), 503–521. https://doi.org/10.16953/deusosbil.413034
20. UN. (2019). Millennium Development Goals - Goal 1: Eradicate Extreme Poverty & Hunger. Retrieved April 6, 2019, from https://www.un.org/millenniumgoals/poverty.shtml
21. Urzainqui, D. G. (2017). Poverty Transitions Without Panel Data? An Appraisal of Synthetic Panel Methods. In Seventh Meeting of the Society for the Study of Economic Inequality (ECINEQ). Retrieved from http://www.ecineq. org/ecineq_nyc17/FILESx2017/CR2/p447.pdf
22. Verbeek, M. (2008). Pseudo-Panels and Repeated Cross-Sections. In L. Matyas & P. Sevestre (Eds.), The Econometrics of Panel Data: Fundamentals and Recent Developments in Theory and Practice (3rd ed., pp. 369–383). Berlin, Heidelberg: Springer Berlin Heidelberg. https://doi.org/10.1007/978- 3-540-75892-1_11
23. World Bank (2021). Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population) - Turkey. Retrieved January 31, 2021, from https://data.worldbank.org/indicator/ SI.POV.DDAY?locations=TR
24. Wuripe, A. (2018). Dynamics of Government’s Role in Poverty Eradication in Turkey: A Study of the Literature. Çukurova Üniversitesi İİBF Dergisi, 22(2), 169–193. Retrieved from http://dergipark.gov.tr/cuiibfd/issue/42702/462759
25. Yaqub, S. (2000). Poverty Dynamics in Developing Countries (Development Bibliography No. 16). Retrieved from http:// www.ophi.org.uk/wp-content/uploads/ssYaqub-2000.pdf