ESA Working Paper No. 04-21

Estimating Poverty Over Time and
Space: Construction of a Time-Variant
Poverty Index for Costa Rica

Romina Cavatassi, Benjamin Davis and Leslie Lipper

ABSTRACT

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Agricultural and Development Economics Division
The Food and Agriculture Organization
of the United Nations

ABSTRACT

This paper presents the construction of a spatially explicit, nationally disaggregated measure of poverty over time in Costa Rica. The paper first describes the two possible methods considered for the construction of a poverty map: principal component analysis (PCA) versus small area estimation. Next, reasons for choosing PCA and a description of its application both at one point in time (1973) and over time are presented together with the resulting poverty maps. The methodology applied represents a methodological innovation in that the resulting poverty map is time variant rather than concentrated in a single moment in time. A comparison of the results obtainable using various techniques and a discussion on the relative merits of the various options available concludes the paper.

© FAO 2004