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Weakly Relative Poverty

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  • Martin Ravallion

    (World Bank)

  • Shaohua Chen

    (World Bank)

Abstract

Prevailing measures of relative poverty are unchanged when all incomes grow or contract by the same proportion. This property stems from seemingly implausible assumptions about the disutility of relative deprivation and the cost of social inclusion. We propose “weakly relative” lines that relax these assumptions. On calibrating our measures to national poverty lines and survey data, we find that half the population of the developing world in 2005 lived in poverty, only half of whom were absolutely poor. The total number of poor rose over 1981 to 2005 despite falling numbers of absolutely poor. With sustained economic growth, the incidence of relative poverty became less responsive to further growth. The number of relatively poor rose, just as the numbers of absolutely poor fell. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 93 (2011)
Issue (Month): 4 (November)
Pages: 1251-1261

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Handle: RePEc:tpr:restat:v:93:y:2011:i:4:p:1251-1261

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Citations

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Cited by:
  1. Camelia Minoiu & Shatakshee Dhongde, 2011. "Global Poverty Estimates: A Sensitivity Analysis," IMF Working Papers 11/234, International Monetary Fund.
  2. Vincenzo Lombardo, 2013. "Relative consumption and human capital accumulation," Economics Bulletin, AccessEcon, vol. 33(2), pages 1091-1100.
  3. Chen, Xi, 2013. "Relative Deprivation in China," MPRA Paper 48582, University Library of Munich, Germany.
  4. Ugo Gentilini & Andy Sumner, 2012. "Poverty Where People Live: What do National Poverty Lines Tell us about Global Poverty?," Working Papers 98, International Policy Centre for Inclusive Growth.
  5. Andos Juhász, 2012. "A Satisfaction-Driven Poverty Indicator: A Bustle around the Poverty Line," SOEPpapers on Multidisciplinary Panel Data Research 461, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.
  7. Vincenzo Lombardo, 2012. "Relative consumption and poverty traps," Discussion Papers 11_2012, CRISEI, University of Naples "Parthenope", Italy.
  8. Dartanto, Teguh & Otsubo, Shigeru, 2013. "Measurements and Determinants of Multifaceted Poverty:Absolute, Relative, and Subjective Poverty in Indonesia," Working Papers 54, JICA Research Institute.
  9. Lokshin, M. & Yemtsov, R., 2013. "Farewell to Destitution?," Journal of the New Economic Association, New Economic Association, vol. 18(2), pages 158-161.
  10. Timothy M. Smeeding, 2009. "New comparative measures of income, material deprivation, and well-being," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(4), pages 745-752.
  11. James Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later," Journal of Economic Inequality, Springer, vol. 8(4), pages 491-524, December.
  12. Richard V. Burkhauser, 2009. "Deconstructing European poverty measures: What relative and absolute scales measure," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(4), pages 715-725.
  13. Vincenzo Lombardo, 2012. "Social inclusion and the emergence of development traps," Discussion Papers 13_2012, CRISEI, University of Naples "Parthenope", Italy.
  14. van der Mensbrugghe, Dominique & Osorio Rodarte, Israel & Burns, Andrew & Baffes, John, 2009. "How to feed the world in 2050: Macroeconomic environment, commodity markets - A longer temr outlook," MPRA Paper 19019, University Library of Munich, Germany.

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