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Brazil within Brazil : testing the poverty map methodology in Minas Gerais, Volume 1
Author:Elbers, Chris; Lanjouw, Peter; Leite, Phillippe George; Country:Brazil;
Date Stored:2008/02/26Document Date:2008/02/01
Document Type:Policy Research Working PaperSubTopics:Science Education; Scientific Research & Science Parks; Population Policies; Small Area Estimation Poverty Mapping; Statistical & Mathematical Sciences
Language:EnglishRegion:Latin America & Caribbean
Report Number:WPS4513Collection Title:Policy Research working paper ; no. WPS 4513
Volume No:1  

Summary: The small-area estimation technique developed for producing poverty maps has been applied in a large number of developing countries. Opportunities to formally test the validity of this approach remain rare due to lack of appropriately detailed data. This paper compares a set of predicted welfare estimates based on this methodology against their true values, in a setting where these true values are known. A recent study draws on Monte Carlo evidence to warn that the small-area estimation methodology could significantly over-state the precision of local-level estimates of poverty, if underlying assumptions of spatial homogeneity do not hold. Despite these concerns, the findings in this paper for the state of Minas Gerais, Brazil, indicate that the small-area estimation approach is able to produce estimates of welfare that line up quite closely to their true values. Although the setting considered here would seem, a priori, unlikely to meet the homogeneity conditions that have been argued to be essential for the method, confidence intervals for the poverty estimates also appear to be appropriate. However, this latter conclusion holds only after carefully controlling for community-level factors that are correlated with household level welfare.

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