Estimating Poverty Dynamics Using Synthetic Panels for IFAD-Supported Projects : A Case Study From Vietnam

The International Fund for Agricultural Development (IFAD) has committed to a poverty reduction target of 80 million people moved out of poverty between 2010 and 2015 through IFAD-supported programmes. The IFAD9 impact evaluation initiative was launched to quantify the target and demonstrate improved accountability, development effectiveness and facilitate learning within the organisation. Specifically, 26 rigorous retrospective impact evaluations are being conducted employing quasi-experimental designs. This paper describes the IFAD9 impact evaluation initiative and illustrates the methodology currently being developed by the IFAD Statistics and Studies for Development Division to estimate the target. This methodology is currently being piloted through in-house econometric analyses, and consists of combining synthetic panels with quasi-experimental methods such as difference-in-difference matching estimators. Synthetic panels overcome the limitation of having to estimate poverty dynamics without real panel data and provide lower and upper bounds estimates of poverty dynamics and mobility. A case study of a project in Vietnam is presented to illustrate the methodology