The distinction between transitory and chronic poverty has been highlighted in the research conducted by the Chronic Poverty Research Centre (see www.chronicpoverty.org). While estimates of the incidence of poverty obtained from sample based studies provide insights into the prevalence of poverty and its severity at a point of time, estimates of persistence of poverty need to be examined through use of a panel data set. In this paper we report some of the findings from analysis of extension of the earlier two-wave panel data set for the years 1970-71 and 1981-82 to a third wave for 1998-99. We therefore have three points at which data was collected for the same households, i.e., the years 1970-71, 1981-82 and 1998-99.
The question of how persistent is poverty is important, because policies to alleviate transitory poverty may not be effective in addressing chronic or persistent poverty. Persistence of poverty suggests that there is failure of the economic system in integrating different sections of society in the growth process. The purpose of this paper is descriptive. We examine the extent of persistence of poverty in rural India based on the 3 surveys conducted by NCAER to track the same households over the period from 1970-71 and 1998-99.
The paper estimates poverty on the basis of data on per capita consumer expenditure by the households. A household is classified as 'poor' if the per capita consumption expenditure of the household for the year is below the 'poverty line'. We have used the poverty line defined by the expert group of the Planning Commission for the classification of the households.
Bhide, S.; Mehta, A.K. Tracking Poverty through Panel Data: Rural Poverty in India 1970-1998, CPRC-IIPA Working Paper No. 28. Chronic Poverty Research Centre, Manchester, UK (2006)