Journal of Economics and Development Studies

Using Nonparametric Conditional Distributions To Visualise Low-Income Mobility
Antonio Fernández-Morales

Abstract
This article introduces a graphical tool that can be very useful for income mobility analysis based on panel data. It is inspired in the concept behind transition matrices but uses nonparametric kernel estimation of the conditional distributions of income to allow the continuous treatment of the income variables. The resulting tool is very flexible, since it is possible to apply several degrees of resolution by varying the number of curves plotted and to add reference lines to locate particular initial incomes, like poverty lines. Thus, the methodology of this paper permits obtaining a visual representation of the mobility of the whole distribution that does not depend on particular mobility indexes, and facilitates focusing on specific parts of the distribution, especially within the low-income population.The method is illustrated with an application to four countries from the EU-SILC panel database, two Mediterranean and two Scandinavian, revealing differences in the probabilities of escaping poverty and the mobility in the lower tail of the distribution of income.

Full Text: PDF     DOI: 10.15640/jeds.v3n3a4