“Chronic and transient poverty in Mexico: 2002-2005â€

This paper uses panel data to decompose total poverty into its chronic and transient components and to estimate the determinants of each type of poverty for the case of Mexico. It was found that 69 percent of total poverty is chronic and 31 percent is transient. Using censored quantile regressions techniques, it was observed that the variables explaining chronic poverty are different from those explaining transient poverty. These results indicate that chronic poverty is an issue which should have a high priority on the public policy agenda and that different public policies are needed to target chronic and transient poverty.