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How Should We Measure Poverty in a Changing World? Methodological Issues and Chinese Case Study

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Author Info
Lars Osberg
Kuan Xu

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Abstract

This study asks whether, in a rapidly changing world, the estimated proportion of the world's population with income below US$1 (adjusted according to purchasing power parity) per day is still a good measure of trends in poverty. It argues that strong economic growth in nations such as China implies that the commonly accepted international poverty line definition of one half median national equivalent income is increasingly relevant and that poverty intensity (the normalized deficit or Foster-Greer-Thorbecke (FGT) index of order one) is a better summary index. This index has a convenient graphical representation-the "poverty box". Using the proposed poverty line and the example of ranking the level of rural poverty in Chinese provinces, the study demonstrates how poverty intensity replicates the poverty rankings of the Sen family of poverty indices and captures most of the information content of higher-order FGT indices. Copyright © 2008 The Authors.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9361.2008.00449.x
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Article provided by Blackwell Publishing in its journal Review of Development Economics.

Volume (Year): 12 (2008)
Issue (Month): 2 (05)
Pages: 419-441
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Handle: RePEc:bla:rdevec:v:12:y:2008:i:2:p:419-441

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Myles, John & Picot, Garnett, 2000. "Poverty Indices and Policy Analysis," Review of Income and Wealth, Blackwell Publishing, vol. 46(2), pages 161-79, June.
  2. Lars Osberg & Kuan Xu, 1999. "Poverty Intensity: How Well Do Canadian Provinces Compare?," Canadian Public Policy, University of Toronto Press, vol. 25(2), pages 179-195, June. [Downloadable!] (restricted)
  3. François Bourguignon & Satya Chakravarty, 2003. "The Measurement of Multidimensional Poverty," Journal of Economic Inequality, Springer, vol. 1(1), pages 25-49, April. [Downloadable!] (restricted)
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  4. Kuan Xu & Lars Osberg, 2002. "On Sen's Approach to Poverty Measures and Recent Developments," Department of Economics at Dalhousie University working papers archive sensw, Dalhousie, Department of Economics. [Downloadable!]
  5. Jenkins, Stephen P & Lambert, Peter J, 1997. "Three 'I's of Poverty Curves, with an Analysis of UK Poverty Trends," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 317-27, July. [Downloadable!] (restricted)
  6. Shorrocks, Anthony F, 1995. "Revisiting the Sen Poverty Index," Econometrica, Econometric Society, vol. 63(5), pages 1225-30, September. [Downloadable!] (restricted)
  7. Thon, Dominique, 1979. "On Measuring Poverty," Review of Income and Wealth, Blackwell Publishing, vol. 25(4), pages 429-39, December.
  8. Schady, Norbert R., 2000. "Picking the poor : indicators for geographic targeting in Peru," Policy Research Working Paper Series 2477, The World Bank. [Downloadable!]
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  9. Lipton, Michael & Ravallion, Martin, 1995. "Poverty and policy," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 41, pages 2551-2657 Elsevier. [Downloadable!] (restricted)
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  10. Michael Förster & Marco Mira d'Ercole, 2005. "Income Distribution and Poverty in OECD Countries in the Second Half of the 1990s," OECD Social, Employment and Migration Working Papers 22, OECD, Directorate for Employment, Labour and Social Affairs. [Downloadable!]
  11. Lars Osberg, 2000. "Poverty in Canada and the United States: measurement, trends, and implications," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 847-877, November. [Downloadable!] (restricted)
  12. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March. [Downloadable!] (restricted)
  13. Hill, Robert J, 2000. " Constructing Bounds on Per Capita Income Differentials across Countries," Scandinavian Journal of Economics, Blackwell Publishing, vol. 102(2), pages 285-302, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lars Osberg & Jiaping Shao & Kuan Xu, 2009. "The growth of poor children in China 1991-2000: why food subsidies may matter," Health Economics, John Wiley & Sons, Ltd., vol. 18(S1), pages S89-S108. [Downloadable!]
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