The Seemingly Underappreciated Role of Panel Data in Measuring Poverty and Economic Transformation

Panel data play an important role in producing insights into households’ welfare dynamics and economic transformation processes. Yet, such data are not readily available for a number of countries, particularly developing countries, because they require considerable financial and technical resources. We offer a review of the current panel data situations in developing countries. We discuss two different, but complementary approaches to address this data challenge: one is to field panel surveys, and the other is to employ statistical techniques to construct pseudo-panel data that can substitute for actual panel data. We finally offer further thoughts on a new hybrid approach that may combine the advantages of the two existing approaches.