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The Measurement Of Poverty With Geographical And Intertemporal Price Dispersion: Evidence From Rwanda

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  • Christophe Muller

Abstract

It is not known to what extent welfare measures result from seasonal and geographical price differences rather than from differences in living standards across households. Using data from Rwanda in 1983, we show that the change in mean living standard indicators caused by local and seasonal price deflation is moderately significant at every quarter. By contrast, the differences in poverty measures caused by this deflation can be considerable, for chronic as well as transient or seasonal poverty indicators. Thus, poverty monitoring and anti-poverty targeting can be badly affected by inaccurate deflation of living standard data. Moreover, when measuring seasonal poverty, the deflation based on regional prices instead of local prices only partially corrects for spatial price dispersion. Using annual local prices instead of quarterly local prices only yields a partial deflation, which distorts the measure of poverty fluctuations across seasons and biases estimates of annual and chronic poverty. Copyright 2008 The Authors.

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Bibliographic Info

Article provided by International Association for Research in Income and Wealth in its journal Review of Income and Wealth.

Volume (Year): 54 (2008)
Issue (Month): 1 (03)
Pages: 27-49

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Handle: RePEc:bla:revinw:v:54:y:2008:i:1:p:27-49

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Citations

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Cited by:
  1. Christophe Muller, 2008. "Anti-Poverty Transfers without Riots in Tunisia," THEMA Working Papers 2008-15, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  2. Christophe Muller, 2005. "The measurement of poverty with geographical and intertemporal price dispersion, Evidence from Rwanda," Working Papers DT/2005/16, DIAL (Développement, Institutions et Mondialisation).
  3. Maia, Carlos & Van der Berg, Servaas, 2010. "When the remedy is worse than the disease: Adjusting survey income data for price differentials, with special reference to Mozambique," MPRA Paper 26571, University Library of Munich, Germany.
  4. Arsène Kouadio & Vincent Monsan & Mamadou Gbongue, 2008. "Réformes de politique agricole et dynamique de la pauvreté alimentaire en Côte d'Ivoire/Agricultural Policy Reforms and Food Poverty Dynamics in Côte d'Ivoire," Working Papers PMMA 2008-07, PEP-PMMA.
  5. John Gibson & Bonggeun Kim, 2012. "Do the Urban Poor Face Higher Food Prices? Evidence from Vietnam," Working Papers in Economics 12/16, University of Waikato, Department of Economics.
  6. Mussa, Richard, 2014. "Food Price Heterogeneity and Income Inequality in Malawi: Is Inequality Underestimated?," MPRA Paper 56080, University Library of Munich, Germany.
  7. Mussa, Richard, 2014. "Do the Poor Pay More for Maize in Malawi?," MPRA Paper 54623, University Library of Munich, Germany.

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