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Relative And Absolute Poverty. The Case Of México, 1992-2004

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Javier Ruiz-Castillo Ucelay ()

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Abstract

This paper advocates that although an absolute notion of poverty should remain an essential ingredient in the evaluation of the standard of living in developing and transition economies, it is time that relative poverty begins to be systematically estimated for those same economies. This prescription is applied to México for the 1992-2004 period, where the Fox Administration has fixed for the first time an absolute poverty line for 2000. To facilitate comparisons with developed countries, the relative poverty line is fixed at 50% of mean equivalent expenditures. Absolute and relative poverty behave in opposite ways during the 1992-2000 business cycle, but both decline significantly during the 2000-04 stagnation period. Relative poverty is above absolute poverty from 1992 to 1994, below it during 1996-98, and above it again in 2000-04. In any case, relative poverty in México is well above relative poverty in developed countries.

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Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we061103.

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Date of creation: Nov 2005
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Handle: RePEc:cte:werepe:we061103

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  1. Martin Ravallion, 2003. "Measuring Aggregate Welfare in Developing Countries: How Well Do National Accounts and Surveys Agree?," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 645-652, 05. [Downloadable!] (restricted)
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  2. Ravallion, Martin & Datt, Gaurav & van de Walle, Dominique, 1991. "Quantifying Absolute Poverty in the Developing World," Review of Income and Wealth, Blackwell Publishing, vol. 37(4), pages 345-61, December.
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  5. Zheng, Buhong, 1997. " Aggregate Poverty Measures," Journal of Economic Surveys, Blackwell Publishing, vol. 11(2), pages 123-62, June. [Downloadable!] (restricted)
  6. Ravallion, M., 1998. "Poverty Lines in Theory and Practice," Papers 133, World Bank - Living Standards Measurement.
  7. Chen, Shaohua & Datt, Gaurav & Ravallion, Martin, 1994. "Is Poverty Increasing in the Developing World?," Review of Income and Wealth, Blackwell Publishing, vol. 40(4), pages 359-76, December.
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  8. Lipton, Michael & Ravallion, Martin, 1995. "Poverty and policy," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 41, pages 2551-2657 Elsevier. [Downloadable!] (restricted)
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  9. Deaton, A. & Zaidi, S., 1999. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," Papers 192, Princeton, Woodrow Wilson School - Development Studies.
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  10. François Bourguignon, 2005. "Comment on "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)" by Angus Deaton," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 20-22, 07. [Downloadable!] (restricted)
  11. Deaton, A. & Grosh, M., 1998. "Consumption," Papers 191, Princeton, Woodrow Wilson School - Development Studies.
  12. Thesia I. Garner & Javier Ruiz-Castillo & Mercedes Sastre, 2003. "The Influence of Demographics and Household-Specific Price Indices on Consumption-Based Inequality and Welfare: A Comparison of Spain and the United States," Southern Economic Journal, Southern Economic Association, vol. 70(1), pages 22-48, July.
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  14. Deaton, A., 2000. "Counting the World's Poor: Problems and Possible Solutions," Papers 197, Princeton, Woodrow Wilson School - Development Studies.
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  15. Slesnick, Daniel T, 1991. "The Standard of Living in the United States," Review of Income and Wealth, Blackwell Publishing, vol. 37(4), pages 363-86, December.
  16. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May. [Downloadable!] (restricted)
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