ARE at AAEA: Mo Alloush: Income, Psychological Well-being, and the Dynamics of Poverty
July 31, 2018
Time: 10 a.m. Monday, Aug. 6
Location: Washington Room 3 / International Development - Lightning Session
Estimating the causal links between income and mental health is difficult due to simultaneity. I overcome this endogeneity with a panel GMM approach to estimate a dynamic system of equations identifying both causal links. Using a nationally representative panel dataset from South Africa, I find evidence of nonlinear impacts in both directions. Investigation of heterogeneity identifies an especially vulnerable subgroup — the poor with low levels of psychological well-being whose feedback loop may be especially strong. A formal test for poverty traps shows that individuals with low levels of psychological well-being exhibit different income dynamics suggestive of a multi-equilibrium poverty trap.
*This is information about one of the 17 people from ARE with a presentation at the 2018 AAEA Annual Meeting Aug. 5–7 in Washington, D.C.
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