Mapping household well-being and socio-economic mobility
Can we identify groups of households that exhibit similar combinations of socio-economic characteristics? Will these clusters help us identify particular socio-economic mobility factors responsible for transitions from one level of 'well-being' to another?
We are exploring statistical methods to identify groups of households that exhibit similar combinations of socio-economic-cultural characteristics (e.g., assets owned, type of education, occupation, etc.) in society. Knowing these “well-being” clusters will enable us to trace particular mobility factors separating one cluster of well-being from another, thereby producing a map of upward mobility from various levels of poverty
People involved: Aishwarya Ratan, Angelin Baskaran, Kentaro Toyama, U. Vasudha, Carol Savia Peters, Nimmi Rangaswamy
Resources on this topic
(1) Click HERE for a summary presentation of the paper:
"The Economic Lives of the Poor" by Abhijit Banerjee and Esther Duflo, November 2006.
The authors present an overview of trends observed across 13 large-scale datasets from different countries, describing the economic characteristics of Poor (<$2 per person per day PPP consumption) and Extremely Poor (<$1 per person per day PPP consumption) households.
A key finding is around the high discount rate of poor households, which prevents the accumulation of small surpluses (saving) during good times, towards future consumption during crises. The poor quality of infrastructure including sanitation, healthcare and education services accessed by the poor, prevents prolonged investment and specialization in any one occupation, which could fetch higher wages. As a result, being involved in multiple, low-paying occupations (including one or more small informal enterprises) across locations, is common among the Poor. Low ownership of physical assets to access cheap capital, and high aversion to risk given the lack of a strong financial safety net, prevent investments to expand own business (farm or non-farm) beyond a very small-scale of operations. Hence the low incomes persist.
(2) The 'Stages of Progress' project led by Anirudh Krishna