Measuring chronic and transient components of poverty: a Bayesian approach.

After the publication of Ravallion’s Econ J 98:1171–1182, 1988 seminal work on chronic and transient poverty, wide attention has been given to the components of poverty. We propose a Bayesian mixture model to measure poverty and divide it into chronic and the transient poverty using the Foster, Greer and Thorbecke (FGT) measure. These two types of poverty are illustrated using the Panel Study of Income Dynamics (PSID) data. [ABSTRACT FROM AUTHOR]