Surveys: Using LSMS, HBS, LFS and SILC for Poverty Analysis

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Surveys Using LSMS, HBS, LFS and SILC for
Poverty Analysis

• Rachel Smith-Govoni
• April 4, 2008

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Goals and Needs

• Goals
• Measure the poverty impact of economic policy
• Measure the distributional impact of economic
  policy
• Needs
• Rely heavily on household survey data

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Household Surveys - types

• Single Topic
• Labour Force Surveys( LFS) (ILO)
• Census national, 10 years Serbia
  2002
• In-between
• Multi-topic

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Household Surveys

• Single Topic
• In-between
• Agricultural Surveys (FAO)
• Demographic and Health (DHS)
• Household Budget Surveys (HBS)
• Multi-topic

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Household Surveys

• Single Topic
• In-between
• Multi-topic
• Multiple Indicator Cluster Survey UNICEF
• Living Standards Measurement Study
• Survey on Income and Living Conditions
  (SILC, EU)

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Census
Purpose

• Accurate measure of the population of a country
• Geographic distribution of the population
• Basic demographic information

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Census

• Not a sample
• Universal coverage
• No sampling errors in estimates
• Some corrections for non-response may be needed
• Not many items

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Census
Content

• Demographic information age, sex,
  race/ethnicity, family and household composition
• Housing information
• Others basic education, labour, disability

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Census

• Albania 2001 (1989)
• BiH 1991 (1981)
• Montenegro 2003 (1991)
• Serbia 2002
• Kosovo 1981

• Limited monitoring

Limited use if looking at impact of policies
affecting taxes, tariffs or pricing
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Census
Uses

• Sample frame
• Link with household surveys for small area
  estimation (data mapping)

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Two types of errors

• Sampling and non-sampling

• Time

• Cost

• Non-response

• Training

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Sampling vs. non-sampling errors
Total error
Sampling error
Non-sampling error
Sample size
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Labour Force Survey (Anketa o radnoj snazi ARS)
Purpose

• Direct measurement of unemployment
• General characteristics of the labour force

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Labour Force Survey
Sample

• Relatively large samples
• Desire to disaggregate to different
  geographic areas
• Individuals of working age

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Labour Force Survey
Content

• Characteristics of the labour force
• Demographics
• Education
• Sectoral distribution of employment
• Degree of formality
• Seasonal
• Income

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Labour Force Survey

• Limitations
• LFS typically capture partial, not total, income,
  under-estimate welfare
• Measurement Error - Labour income measurement
  error at both ends of the distribution

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LFS in Latin AmericaItem non-response
Source Feres, 1998
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Household Budget Survey (Anketa o potrosnji
domacinstava APD,

• Inputs to National Accounts on consumer
  expenditures
• Track changes in expenditures over time
• Weights for the Consumer Price Index
• (Indeks Potrosackih Cijena)

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• Non response rates (Eurostat Household Budget
  Surveys, 2003)
• Bulgaria 39.7
• Estonia, 44
• Hungary, 58.8 before replacement
• Romania, 21.6

Sample

• Usually medium size sample
• High non-response rates

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Household Budget Surveys
Content

• Total Income
• Total Consumption - diary
• Short Demographics
• Central Europe agriculture
• Limited health and education

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Household Budget Surveys
Poverty Measurement

• Consumption based welfare measure
• Purpose of an HBS survey is NOT to measure
  welfare but to precisely measure mean
  expenditures on specific goods and services
• These are conflicting goals

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Household Budget Surveys
Poverty Measurement

• Shortest possible reference periods
• Minimize number of omitted expenditures
• Good for precise measurement of regional or
  national means
• Because of lumpy nature of purchases, not good
  for comparisons among households

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Multi-topic Household Surveys

• Those with a focus on measuring poverty
• Survey on Income and Living Conditions (SILC)
• Living Standards Measurement Study Surveys (LSMS)

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Multi-topic Household Surveys
Purpose

• Analysis of welfare levels and distribution
• Study links between welfare levels and individual
  and household characteristics, economic, human
  and social capital
• Social exclusion
• Levels of access to, and use of, social services,
  government programs and spending

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Multi-topic Household Surveys
Sample

• Small sample sizes
• Trade-off issue Quality and cost considerations
• Limits ability to assess programs or policies
  that affect small groups or small areas
  (over-sample)
• Infrequent in many countries

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LSMS 2002, 2003, 2007
Content 1 household composition 2 housing 3
individual demographics 4 health 5 labour 6
work history 7 social programs 8 migration 9
values and opinions 10 consumption 11 agriculture
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Multi-topic Household Surveys
Poverty Measurement

• Total consumption
• Longer reference periods
• Able to calculate use value of durables and
  housing
• Total income
• Suffers from standard measurement errors

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Designs for surveys across time

• Repeated cross sectional surveys
• (e.g. Household Budget Survey, Labour Force
  Survey)
• Common design for large government surveys
• New sample drawn for each survey
• Carry similar questions each year
• Used for trend analysis at aggregate level

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Designs for surveys across time

• Cohort Studies
• Sample often based on an age group
• Follow up same sample members at fairly long
  intervals
• Developmental data as well as social and economic
  data
• Data from parents, teachers associated with
  cohort member

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Designs for surveys across time

• e.g. Panel Study of Income Dynamics, USA since
  1968!
• Living in BiH 2001-2004, LSMS Albania 2002-2004,
• LSMS Serbia 2002-2003
• Draw a sample at one point in time and follow
  those sample members indefinitely (or as long as
  the funding continues)
• Collect individual level data in household
  context
• Repeated measures at fixed intervals (annual data
  collection)

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Advantages of Panel Data

• Comparison of same individual over time -
  outcomes
• Track of aspects of social change
• Facilitates study of change and causal inference
• Minimise the problem of inaccurate recall
• Compare a persons expectations with real change
• Look at how changes in individuals behaviour
  affects their households
• Identifies the co-variates of change and the
  relative risks of particular events for different
  types of people

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Changes in Employment Status
A CROSS-SECTIONAL INFORMATION
Unemployed
Employed
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Changes in Employment Status
B PANEL INFORMATION
Still Unemployed
Unemployed
Still Employed
Employed
2001
2007
Net change - 0.1 unemployed
Actual change is 10.1
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Balkan Examples

• Albania - 15 of the unemployed in 2002 had made
  the transition to formal sector employment by
  2004
• BiH - About half who were poor in 2001 remained
  poor in 2004. Many individuals moved out of
  poverty.
• (Cross section headcount 18 for both years)

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• Employment and the labour market
• Unemployment duration and exit rates
• Do the unemployed find stable employment?
• The effect of non-standard employment on mental
  health
• Temporary jobs who gets them, what are they
  worth, and do they lead anywhere?
• Family and Household
• Patterns of household formation and dissolution
• Breaking up - finances and well-being following
  divorce or split
• The effect of parents employment on children's
  educational attainment

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A Sample

• Concept of longitudinal household problematic
  for a panel - households change in composition
  over time or disappear altogether
• Individual level sample

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Following rules

• All members of households interviewed at Wave One
• Children born to these original sample members
• Original members are followed as they move house,
  and any new individuals who join with them are
  eligible to be interviewed
• New sample members are followed if they split
  from the original member

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Questionnaire design

• Core content carried every wave
• Rotating core questions
• One-off variable components
• lifetime job history
• marital and fertility history
• Variable questions to respond to new research and
  policy agendas

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Attrition in panel surveys

• Inevitable to some extent but can be minimised
• Multiple sources of attrition in a panel
• refusal to take part
• respondents move and cannot be traced
• non-contacts
• Worry is potential bias if people who drop out
  differ significantly from those who stay in

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UK Panel Wave 1 RespondentsWave-on wave
re-interview rates
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Fieldwork

• respondent incentives as a thank-you
• extended fieldwork period for tail-enders
• refusal conversion programme
• tracking procedures during fieldwork
• panel maintenance between waves
• Change of Address cards to update addresses
• mailing of Respondent Report
• details of contacts with respondents between
  waves

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The user database

• Longitudinal data is complex
• Provide users with database structure which
  enhances usability
• Consistent record structure over time
• Key variables for matching and linking data cross
  wave
• Consistent variable naming conventions

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Conclusions

• Longitudinal panel data allows us to answer
  research questions that cannot be answered with
  with cross-sectional data
• Provides a different view of the world - see
  process through the life-course not just a static
  picture
• Is complex (but so is the real world) - so needs
  to be well designed and conducted with sufficient
  resources to be successful

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Final points

• Welfare household surveys- always missing the
  homeless, street children, institutionalized
  population
• No one survey can meet all needs, review its
  purpose, coverage, content and quality before
  using
• Need a system of surveys that meets the needs of
  data users