Advanced Search
MyIDEAS: Login to save this article or follow this journal

Weakly Relative Poverty

Contents:

Author Info

  • 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.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00127
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

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

as in new window
Handle: RePEc:tpr:restat:v:93:y:2011:i:4:p:1251-1261

Contact details of provider:
Web page: http://mitpress.mit.edu/journals/

Order Information:
Web: http://mitpress.mit.edu/journal-home.tcl?issn=00346535

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
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.:
as in new window
  1. Foster, James E & Shorrocks, Anthony F, 1991. "Subgroup Consistent Poverty Indices," Econometrica, Econometric Society, Econometric Society, vol. 59(3), pages 687-709, May.
  2. Banerjee, Abhijit & Duflo, Esther, 2006. "The Economic Lives of the Poor," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5968, C.E.P.R. Discussion Papers.
  3. Hopkins, Ed, 2008. "Inequality, Happiness and Relative Concerns: What Actually is their Relationship?," SIRE Discussion Papers, Scottish Institute for Research in Economics (SIRE) 2008-01, Scottish Institute for Research in Economics (SIRE).
  4. Blanchflower, David G. & Oswald, Andrew J., 2001. "Well-Being Over Time in Britain and the USA," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 616, University of Warwick, Department of Economics.
  5. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, Elsevier, vol. 61(3), pages 359-381, September.
  6. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 114(3), pages 817-868, August.
  7. Bruce E. Hansen, 2000. "Sample Splitting and Threshold Estimation," Econometrica, Econometric Society, Econometric Society, vol. 68(3), pages 575-604, May.
  8. Oswald, Andrew, 1997. "Happiness and Economic Performance," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 478, University of Warwick, Department of Economics.
  9. Alpizar, Francisco & Carlsson, Fredrik & Johansson-Stenman, Olof, 2001. "How Much Do We Care About Absolute Versus Relative Income and Consumption?," Working Papers in Economics, University of Gothenburg, Department of Economics 63, University of Gothenburg, Department of Economics.
  10. Luuk Van Kempen, 2004. "Are the poor willing to pay a premium for designer labels? a field experiment in Bolivia," Oxford Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 32(2), pages 205-224.
  11. Martin Ravallion & Shaohua Chen & Prem Sangraula, 2009. "Dollar a Day Revisited," World Bank Economic Review, World Bank Group, World Bank Group, vol. 23(2), pages 163-184, June.
  12. De MESNARD, Louis, 2007. "Poverty reduction: the paradox of the endogenous poverty line," LEG - Document de travail - Economie, LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne 2007-05, LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne.
  13. Erzo F.P. Luttmer, 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," NBER Working Papers 10667, National Bureau of Economic Research, Inc.
  14. Marcel Fafchamps & Forhad Shilpi, 2006. "Subjective Welfare, Isolation, and Relative Consumption," Economics Series Working Papers, University of Oxford, Department of Economics GPRG-WPS-056, University of Oxford, Department of Economics.
  15. Lanjouw, Peter & Ravallion, Martin, 1995. "Poverty and Household Size," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 105(433), pages 1415-34, November.
  16. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 45(3), pages 251-278, July.
  17. Geeta Kingdon & John Knight, 2004. "Community, Comparisons and Subjective Well-being in a Divided Society," Development and Comp Systems, EconWPA 0409067, EconWPA.
  18. Lars Osberg & Kuan Xu, 2007. "How Should We Measure Poverty in a Changing World? Methodological Issues and Chinese Case Study," Department of Economics at Dalhousie University working papers archive, Dalhousie, Department of Economics rderevision9, Dalhousie, Department of Economics.
  19. Angus Deaton & Alan Heston, 2008. "Understanding PPPs and PPP-based national accounts," Working Papers, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies. 1120, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  20. J. Solnick, Sara & Hemenway, David, 1998. "Is more always better?: A survey on positional concerns," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 37(3), pages 373-383, November.
  21. Robert Ackland & Steve Dowrick & Benoit Freyens, 2013. "Measuring Global Poverty: Why PPP Methods Matter," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 95(3), pages 813-824, July.
  22. Ravallion, Martin & Datt, Gaurav & van de Walle, Dominique, 1991. "Quantifying Absolute Poverty in the Developing World," Review of Income and Wealth, International Association for Research in Income and Wealth, International Association for Research in Income and Wealth, vol. 37(4), pages 345-61, December.
  23. Ravallion, Martin & Lokshin, Michael, 2010. "Who cares about relative deprivation?," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 73(2), pages 171-185, February.
  24. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, Econometric Society, vol. 44(2), pages 219-31, March.
  25. Menno Pradhan & Martin Ravallion, 2000. "Measuring Poverty Using Qualitative Perceptions Of Consumption Adequacy," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 82(3), pages 462-471, August.
  26. Stadt, H. van de & Geer, S.A. van de & Kapteyn, A.J., 1985. "The relativity of utility: Evidence from panel data," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-364325, Tilburg University.
  27. Branko Milanovic, 2008. "Qat Expenditures in Yemen and Djibouti: An Empirical Analysis," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 17(5), pages 661-687, November.
  28. Rao, Vijayendra, 2001. "Poverty and public celebrations in rural India," Policy Research Working Paper Series, The World Bank 2528, The World Bank.
  29. Kilpatrick, Robert W, 1973. "The Income Elasticity of the Poverty Line," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 55(3), pages 327-32, August.
  30. Rebecca M. Blank, 2008. "Presidential address: How to improve poverty measurement in the United States," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 27(2), pages 233-254.
  31. Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780198292975, October.
  32. Ravallion, Martin & Lokshin, Michael, 2002. "Self-rated economic welfare in Russia," European Economic Review, Elsevier, Elsevier, vol. 46(8), pages 1453-1473, September.
  33. Goedhart, T. & Halberstadt, V. & Praag, B.M.S. van & Kapteyn, A.J., 1977. "The poverty line: Concept and measurement," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-361898, Tilburg University.
  34. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, Elsevier, vol. 89(5-6), pages 997-1019, June.
  35. Frank, Robert H, 1997. "The Frame of Reference as a Public Good," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 107(445), pages 1832-47, November.
  36. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, Econometric Society, vol. 55(4), pages 749-64, July.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Ugo Gentilini & Andy Sumner, 2012. "Poverty Where People Live: What do National Poverty Lines Tell us about Global Poverty?," Working Papers, International Policy Centre for Inclusive Growth 98, International Policy Centre for Inclusive Growth.
  2. Lokshin, M. & Yemtsov, R., 2013. "Farewell to Destitution?," Journal of the New Economic Association, New Economic Association, New Economic Association, vol. 18(2), pages 158-161.
  3. Dhongde, Shatakshee & Minoiu, Camelia, 2013. "Global Poverty Estimates: A Sensitivity Analysis," World Development, Elsevier, Elsevier, vol. 44(C), pages 1-13.
  4. 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.
  5. Vincenzo Lombardo, 2013. "Relative consumption and human capital accumulation," Economics Bulletin, AccessEcon, vol. 33(2), pages 1091-1100.
  6. Marchand, Joseph, 2014. "The Distributional Impacts of an Energy Boom in Western Canada," CLSSRN working papers, Vancouver School of Economics clsrn_admin-2014-28, Vancouver School of Economics, revised 16 Jun 2014.
  7. Timothy M. Smeeding, 2009. "New comparative measures of income, material deprivation, and well-being," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 28(4), pages 745-752.
  8. Andos Juhász, 2012. "A Satisfaction-Driven Poverty Indicator: A Bustle around the Poverty Line," SOEPpapers on Multidisciplinary Panel Data Research, DIW Berlin, The German Socio-Economic Panel (SOEP) 461, DIW Berlin, The German Socio-Economic Panel (SOEP).
  9. Vincenzo Lombardo, 2012. "Relative consumption and poverty traps," Discussion Papers, CRISEI, University of Naples "Parthenope", Italy 11_2012, CRISEI, University of Naples "Parthenope", Italy.
  10. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  11. Vincenzo Lombardo, 2012. "Social inclusion and the emergence of development traps," Discussion Papers, CRISEI, University of Naples "Parthenope", Italy 13_2012, CRISEI, University of Naples "Parthenope", Italy.
  12. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers, CEDLAS, Universidad Nacional de La Plata 0151, CEDLAS, Universidad Nacional de La Plata.
  13. James Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later," Journal of Economic Inequality, Springer, Springer, vol. 8(4), pages 491-524, December.
  14. Dartanto, Teguh & Otsubo, Shigeru, 2013. "Measurements and Determinants of Multifaceted Poverty:Absolute, Relative, and Subjective Poverty in Indonesia," Working Papers, JICA Research Institute 54, JICA Research Institute.
  15. Richard V. Burkhauser, 2009. "Deconstructing European poverty measures: What relative and absolute scales measure," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 28(4), pages 715-725.
  16. Chen, Xi, 2013. "Relative Deprivation in China," MPRA Paper 48582, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:93:y:2011:i:4:p:1251-1261. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karie Kirkpatrick).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.