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On various ways of measuring pro-poor growth

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  • Deutsch, Joseph
  • Silber, Jacques

Abstract

This paper examines three possible approaches to pro-poor growth. The first one assumes that the poverty line remains constant in real terms over time. The second perspective examines the case where the poverty line is equal to half the median of the income distribution but assumes that such a poverty line is determined exogenously. Finally we also propose a third type of decomposition of the change in poverty, one which is obtained when the poverty line is assumed to be endogenous. In addition, whatever the assumption made concerning the poverty line, we take both a relative and an absolute approach to inequality measurement when defining pro-poor growth. With a relative approach to pro-poor growth it is assumed that inequality does not to vary when all incomes are multiplied by a constant whereas, with an absolute approach to pro-poor growth, inequality is supposed not to vary when an equal sum is added to all incomes. The empirical illustration covers the period 1990-2013;2006 in Israel and the analysis is based on the use of the FGT poverty index. It turns out that the assumptions made concerning the way the poverty line is defined and the choice between a relative and an absolute approach to pro-poor growth greatly affect the results. As a whole however growth was pro-rich in Israel during the 1990-2013;2006 period. --

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File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2011-13
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Bibliographic Info

Article provided by Kiel Institute for the World Economy in its journal Economics: The Open-Access, Open-Assessment E-Journal.

Volume (Year): 5 (2011)
Issue (Month): 13 ()
Pages: 1-57

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Handle: RePEc:zbw:ifweej:201113

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Keywords: inequality; Israel; pro-poor growth; Watts index;

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References

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  1. Nanak Kakwani & Shahid Khandker & Hyun H. Son, 2004. "Pro-poor growth: concepts and measurement with country case studies," Working Papers 1, International Policy Centre for Inclusive Growth.
  2. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-20, July.
  3. Hyun H. Son & Nanak Kakwani, 2006. "Global Estimates of Pro-Poor Growth," Working Papers 31, International Policy Centre for Inclusive Growth.
  4. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank.
  5. Chantreuil, F. & Trannoy, A., 1999. "Inequality Decomposition Values: the Trade-Off Between Marginality and Consistency," Papers 99-24, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
  6. Ravallion, Martin & Shaohua Chen, 2001. "Measuring pro-poor growth," Policy Research Working Paper Series 2666, The World Bank.
  7. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July.
  8. Mercedes Sastre & Alain Trannoy, 2002. "Shapley inequality decomposition by factor components: Some methodological issues," Journal of Economics, Springer, vol. 9(1), pages 51-89, December.
  9. Son, Hyun Hwa, 2004. "A note on pro-poor growth," Economics Letters, Elsevier, vol. 82(3), pages 307-314, March.
  10. Kakwani, Nanak, 1980. "On a Class of Poverty Measures," Econometrica, Econometric Society, vol. 48(2), pages 437-46, March.
  11. Grosse, Melanie & Harttgen, Kenneth & Klasen, Stephan, 2008. "Measuring Pro-Poor Growth in Non-Income Dimensions," World Development, Elsevier, vol. 36(6), pages 1021-1047, June.
  12. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
  13. Buhmann, Brigitte, et al, 1988. "Equivalence Scales, Well-Being, Inequality, and Poverty: Sensitivity Estimates across Ten Countries Using the Luxembourg Income Study (LIS) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-42, June.
  14. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
  15. Nissanov, Zoya & Silber, Jacques, 2009. "On pro-poor growth and the measurement of convergence," Economics Letters, Elsevier, vol. 105(3), pages 270-272, December.
  16. Nanak Kakwani & Hyun H. Son, 2008. "Poverty Equivalent Growth Rate," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(4), pages 643-655, December.
  17. Michael Grimm, 2005. "Removing the anonymity axiom in assessing pro-poor growth," Ibero America Institute for Econ. Research (IAI) Discussion Papers 113, Ibero-America Institute for Economic Research.
  18. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  19. Hyun Son, 2003. "A New Poverty Decomposition," Journal of Economic Inequality, Springer, vol. 1(2), pages 181-187, August.
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Cited by:
  1. Marek Kośny, 2012. "Relative Income Changes and an Identification of Growth Pattern," Working Papers 268, ECINEQ, Society for the Study of Economic Inequality.
  2. Marek Kosny, 2011. "Relative affluence measures and an identification of growth pattern," Working Papers 230, ECINEQ, Society for the Study of Economic Inequality.
  3. Ivica Rubil, 2013. "Accounting for Regional Poverty Differences in Croatia: Exploring the Role of Disparities in Average Income and Inequality," Working Papers 1301, The Institute of Economics, Zagreb.
  4. Rubil, Ivica, 2013. "Accounting for regional poverty differences in Croatia: Exploring the role of disparities in average income and inequality," MPRA Paper 43827, University Library of Munich, Germany.

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