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Estimating Consumption Deprivation in India Using Survey Data: A State-Level Rural-Urban Analysis Before and During Reform Period

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  • T. Krishna Kumar
  • Sushanta Mallick
  • Jayarama Holla

Abstract

This paper assesses deprivation in India employing a measure proposed by Sitaramam and using consumption data at the household level. As cereals constitute a staple food and form a major portion of expenditure on food, the deprivation measure considered here is deprivation in cereal consumption. The total expenditure at which the Engel curve for cereals turns from concave to convex is taken as the cut-off to determine the deprived households. It is shown that cereal deprivation at the all-India level exhibits a declining trend over the period 1987-1988 and 1999-2000 in the rural sector, while there is little change in the urban sector. Further, this decline in cereal deprivation seems to have been slowing down during the reform period. The estimates of deprivation are poorly correlated with the Head Count Index (HCI) and Poverty Gap Index (PGI) at state level, both in rural and urban sectors. They, however, have better temporal correlations with those poverty measures. We offer some explanation for these observed differences in alternate deprivation indices. The trends in cereal deprivation are accompanied in some cases by a decline, in real terms, in maximum cereal consumption of each group of consumers. Whether this is an improvement or otherwise of the living standards of the poor, must await further analysis of per capita food consumption in general, with an analysis of prices and quantities of various food items. It is hoped that this kind of study on deprivation of essential commodities may increase our understanding of poverty, and even suggest direct intervention strategies.

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Bibliographic Info

Article provided by Taylor and Francis Journals in its journal Journal of Development Studies.

Volume (Year): 45 (2009)
Issue (Month): 4 ()
Pages: 441-470

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Handle: RePEc:taf:jdevst:v:45:y:2009:i:4:p:441-470

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References

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  1. Deaton, A. & Paxson, C., 1997. "Economies of Scale, Household Size, and the Demand for Food," Papers 178, Princeton, Woodrow Wilson School - Development Studies.
  2. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
  3. B. S. Minhas & L. R. Jain & S. M. Kansal & M. R. Saluja, 1987. "On the Choice of Appropriate Consumer Price Indices and Data Sets for Estimating the Incidence of Poverty in India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 22(1), pages 19-49, January.
  4. Subramanian, Shankar & Deaton, Angus, 1996. "The Demand for Food and Calories," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 133-62, February.
  5. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July.
  6. Datt, Gaurav & Ravallion, Martin, 1996. "Macroeconomic crises and poverty monitoring : a case study for India," Policy Research Working Paper Series 1685, The World Bank.
  7. Angus Deaton & Alessandro Tarozzi, 2000. "Prices and poverty in India," Working Papers 213, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  8. Bhanoji Rao, V. V., 1981. "Measurement of deprivation and poverty based on the proportion spent on food: An exploratory exercise," World Development, Elsevier, vol. 9(4), pages 337-353, April.
  9. Ingco, Merlinda D., 1991. "Is rice becoming an inferior good? Food demand in the Philippines," Policy Research Working Paper Series 722, The World Bank.
  10. Angus Deaton & Valerie Kozel, 2005. "Data and Dogma: The Great Indian Poverty Debate," World Bank Research Observer, World Bank Group, vol. 20(2), pages 177-199.
  11. Richard Palmer-Jones & Kunal Sen, 2003. "What has luck got to do with it? A regional analysis of poverty and agricultural growth in rural India," The Journal of Development Studies, Taylor and Francis Journals, vol. 40(1), pages 1-31.
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Cited by:
  1. Rama Pal, 2012. "Measuring incidence of catastrophic out-of-pocket health expenditure: with application to India," International Journal of Health Care Finance and Economics, Springer, vol. 12(1), pages 63-85, March.
  2. Rama Pal, 2010. "Analysing catastrophic OOP health expenditure in India: Concepts, determinants and policy implications," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-001, Indira Gandhi Institute of Development Research, Mumbai, India.
  3. M.H. Suryanarayana, 2011. "Policies for the Poor: Verifying the Information Base," Journal of Quantitative Economics, The Indian Econometric Society, vol. 9(1), pages 73-88.

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