Poverty dynamics in Costa Rica with panel data from cross-sections

An analysis of the dynamics of poverty requires longitudinal data. In Costa Rica, as in most Latin American countries, such data are unavailable. In order to examine the dynamic aspects of poverty, this article uses cross-sectional information to develop a set of panel data. Given a stable macroeconomic environment and a constant poverty rate, these data show that the poor households studied over a three-year period were not always made up of the same units, as significant turnover rates were found to exist between the poor and the non-poor.