In theory, it is possible that the persistent poverty that has emerged in many transition economies, is attributable to underlying, non-convexities in the dynamics of household incomes - such that a vulnerable household will never recover from a sufficiently large, but short-lived shock to its...

It seems natural to expect the rich to oppose policies to redistribute income from the rich to the poor, and the poor to favor such policies. But this may be too simple a model, say the Authors. Expectations of future welfare may come into play. Well-off people on a downward trajectory may well...

Paradoxically, when economists analyze a policy's impact on welfare they typically assume that people are the best judges of their own welfare, yet resist directly asking them if they are better off. Early ideas of"utility"were explicitly subjective, but modern economists generally ignore...

The immediate welfare costs of an economywide crisis can be high, but are there also lasting impacts? And are they greater in some geographic areas than others? The authors study Indonesia’s severe financial crisis of 1998. They use 10 national surveys spanning 1993–2002, each covering...

The authors argue that the welfare inferences drawn from subjective answers to questions on qualitative surveys are clouded by concerns about the structure of measurement errors and how latent psychological factors influence observed respondent characteristics. They propose a panel data model to...