Estimation of Poverty Transition Matrices with Noisy Data

This paper investigates potential measurement error biases in estimated poverty transition matrices. Transition matrices based on survey expenditure data has been compared to transition matrices based on measurement-error-free simulated expenditure. The simulation model uses estimates that correc… t for measurement error in expenditure. This dynamic model needs error-free initial conditions that can not be derived from these estimates. [Working Paper No. 270]