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How to Monitor Poverty for the Millennium Development Goals

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  • Angus Deaton

Abstract

I consider two issues concerning how to monitor global poverty for the Millennium Development Goals, the selection of poverty lines, and the data sources for monitoring poverty over time. I discuss the choice of a single international line, converted using purchasing power parity (PPP) exchange rates, versus the use of country- specific poverty lines. I note the difficulties in constructing PPP exchange rates but argue in favor of a single international line, converted at PPP rates, which would be regularly updated using domestic price indexes. Re-basing, using updated PPP rates, would be done infrequently. For example, if the global poverty numbers were estimated annually, the PPP rates might be updated once a decade. In any case, it is important that the poverty estimates be calculated much more frequently than the PPP rates are revised. I discuss whether monitoring should be performed using national accounts data on income or consumption, supplemented by distributional data so as to make inferences about poverty, or using data from household survey data. I argue that data from the national accounts are not suitable for measuring poverty and that their use requires assumptions that are unlikely to hold. In particular, monitoring poverty through the national accounts runs the risk of pre- judging important issues that are properly the subject of measurement, not assumption, such as the extent to which aggregate growth benefits the poor. I argue that poverty should be directly measured using household survey data, and I discuss what needs to be done to enable such monitoring to be placed on a sounder basis.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Human Development and Capabilities.

Volume (Year): 4 (2003)
Issue (Month): 3 ()
Pages: 353-378

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Handle: RePEc:taf:jhudca:v:4:y:2003:i:3:p:353-378

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Related research

Keywords: Poverty; Monitoring; Measurement; Purchasing Power Parity; National Accounts; Household Surveys;

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Cited by:
  1. Charles Meth, 2004. "Half Measures: The ANC's Unemployment and Poverty Reduction Goals," Working Papers 04089, University of Cape Town, Development Policy Research Unit.
  2. Camelia Minoiu & Sanjay Reddy, 2008. "Kernel Density Estimation Basedon Grouped Data," IMF Working Papers 08/183, International Monetary Fund.
  3. Larru, Jose Maria, 2006. "La ayuda al desarrollo: ¿reduce la pobreza?
    [Foreign Aid: reduce poverty? (in Spanish)]
    ," MPRA Paper 2341, University Library of Munich, Germany.
  4. De Herdt, Tom, 2004. "Comment mesurer la pauvreté? Une déconstruction méthodologique de l’évolution de la pauvreté monétaire à Kisenso (Kinshasa RDC), 1997-2002," IOB Discussion Papers 2004.06, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
  5. Lelli, Sara, 2004. "What Money Can't Buy: The Relevance of Income Redistribution for Functioning Levels," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  6. Sanjeev Gupta & Catherine A. Pattillo & Kevin Joseph Carey, 2005. "Sustaining Growth Accelerations and Pro-Poor Growth in Africa," IMF Working Papers 05/195, International Monetary Fund.
  7. Pansini, Rosaria Vega, 2004. "La Fissazione della International Poverty Line: una nuova proposta applicata al Vietnam
    [Setting a new International Poverty Line: a new proposal applied to Vietnam]
    ," MPRA Paper 4923, University Library of Munich, Germany.
  8. Martín Cicowiez & Luciano Di Gresia & Leonardo Gasparini, 2007. "Políticas Públicas y Objetivos de Desarrollo del Milenio en la Argentina," CEDLAS, Working Papers 0056, CEDLAS, Universidad Nacional de La Plata.
  9. Leonardo Gasparini & Guillermo Cruces & Leopoldo Tornarolli & Mariana Marchionni, 2009. "A Turning Point? Recent Developments on Inequality in Latin America and the Caribbean," CEDLAS, Working Papers 0081, CEDLAS, Universidad Nacional de La Plata.
  10. Kanbur, Ravi, 2004. "Growth, Inequality And Poverty: Some Hard Questions," Working Papers 127133, Cornell University, Department of Applied Economics and Management.
  11. World Bank, 2005. "Burkina Faso : Reducing Poverty Through Sustained Equitable Growth, Poverty Assessment," World Bank Other Operational Studies 8618, The World Bank.
  12. Ugo Gentilini, 2006. "How are We doing on Poverty and Hunger Reduction? A New Measyre of Country-Level Progress," Departmental Working Papers of Economics - University 'Roma Tre' 0068, Department of Economics - University Roma Tre.
  13. Leonardo Gasparini & Federico Gutiérrez & Leopoldo Tornarolli, 2007. "Growth And Income Poverty In Latin America And The Caribbean: Evidence From Household Surveys," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(2), pages 209-245, 06.
  14. Gentilini, Ugo & Webb, Patrick, 2008. "How are we doing on poverty and hunger reduction? A new measure of country performance," Food Policy, Elsevier, vol. 33(6), pages 521-532, December.
  15. Leonardo Gasparini & Matías Horenstein & Sergio Olivieri, 2006. "Economic Polarisation in Latin America and the Caribbean: What do Household Surveys Tell Us?," CEDLAS, Working Papers 0038, CEDLAS, Universidad Nacional de La Plata.
  16. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.

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