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How Should We Measure Poverty in a Changing World? Methodological Issues and Chinese Case Study

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  • Lars Osberg
  • Kuan Xu

    ()
    (Department of Economics, Dalhousie University)

Abstract

This study asks whether, in a rapidly changing world, the estimated proportion of the world's population with income below US$1 (adjusted according to purchasing power parity) per day is still a good measure of trends in poverty. It argues that strong economic growth in nations such as China implies that the commonly accepted international poverty line definition of one half median national equivalent income is increasingly relevant and that poverty intensity (the normalized deficit or Foster-Greer-Thorbecke (FGT) index of order one) is a better summary index. This index has a convenient graphical representation-the "poverty box". Using the proposed poverty line and the example of ranking the level of rural poverty in Chinese provinces, the study demonstrates how poverty intensity replicates the poverty rankings of the Sen family of poverty indices and captures most of the information content of higher-order FGT indices. Copyright � 2008 The Authors.

(This abstract was borrowed from another version of this item.)

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File URL: http://www.economics.dal.ca/RePEc/dal/wparch/RDErevision9.pdf
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Bibliographic Info

Paper provided by Dalhousie, Department of Economics in its series Department of Economics at Dalhousie University working papers archive with number rderevision9.

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Length: 47 pages
Date of creation: 23 Feb 2007
Date of revision:
Handle: RePEc:dal:wparch:rderevision9

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Keywords: development; poverty; measurement; China; growth;

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References

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  1. Schady, Norbert R, 2002. "Picking the Poor: Indicators for Geographic Targeting in Peru," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 417-33, September.
  2. Subramanian, S., 2005. "Poverty Measurement and Theories of Beneficence," Working Paper Series RP2005/62, World Institute for Development Economic Research (UNU-WIDER).
  3. Lars Osberg, 2000. "Poverty in Canada and the United States: measurement, trends, and implications," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 847-877, November.
  4. Michael F. Förster & Marco Mira d'Ercole, 2005. "Income Distribution and Poverty in OECD Countries in the Second Half of the 1990s," OECD Social, Employment and Migration Working Papers 22, OECD Publishing.
  5. François Bourguignon & Satya Chakravarty, 2003. "The Measurement of Multidimensional Poverty," Journal of Economic Inequality, Springer, vol. 1(1), pages 25-49, April.
  6. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
  7. Shorrocks, Anthony F, 1995. "Revisiting the Sen Poverty Index," Econometrica, Econometric Society, vol. 63(5), pages 1225-30, September.
  8. Jenkins, Stephen P & Lambert, Peter J, 1997. "Three 'I's of Poverty Curves, with an Analysis of UK Poverty Trends," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 317-27, July.
  9. Myles, John & Picot, Garnett, 2000. "Poverty Indices and Policy Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(2), pages 161-79, June.
  10. Thon, Dominique, 1979. "On Measuring Poverty," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(4), pages 429-39, December.
  11. Lipton, Michael & Ravallion, Martin, 1993. "Poverty and policy," Policy Research Working Paper Series 1130, The World Bank.
  12. Kuan Xu & Lars Osberg, 2002. "On Sen's Approach to Poverty Measures and Recent Developments," Department of Economics at Dalhousie University working papers archive sensw, Dalhousie, Department of Economics.
  13. Hill, Robert J, 2000. " Constructing Bounds on Per Capita Income Differentials across Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(2), pages 285-302, June.
  14. Lars Osberg & Kuan Xu, 1999. "Poverty Intensity: How Well Do Canadian Provinces Compare?," Canadian Public Policy, University of Toronto Press, vol. 25(2), pages 179-195, June.
  15. John L. Rodgers & Joan R. Rodgers, 1991. "Measuring the Intensity of Poverty among Subpopulations: Applications to the United States," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 338-361.
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Cited by:
  1. Duangkamon Chotikapanich & William Griffiths & Wasana Karunarathne & D.S. Prasada Rao, 2013. "Calculating Poverty Measures from the Generalised Beta Income Distribution," The Economic Record, The Economic Society of Australia, vol. 89, pages 48-66, 06.
  2. Lars Osberg & Jiaping Shao & Kuan Xu, 2009. "The growth of poor children in China 1991–2000: why food subsidies may matter," Health Economics, John Wiley & Sons, Ltd., vol. 18(S1), pages S89-S108, April.
  3. Achyut Wagle, 2008. "Human Capital Flight: The Cause of Underdevelopment," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 20, pages 32-43, April.
  4. Ravallion, Martin & Chen, Shaohua, 2009. "Weakly relative poverty," Policy Research Working Paper Series 4844, The World Bank.
  5. Matshe, Innocent & Moyo-Maposa, Sibonginkosi & Zikhali, Precious, 2013. "Water Poverty and Rural Development: Evidence from South Africa," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(2), August.
  6. Lars Osberg, 2010. "Measuring Economic Insecurity and Vulerability as Part of Economic Well-Being: Concepts and Context," Department of Economics at Dalhousie University working papers archive osberg_measuring_economic, Dalhousie, Department of Economics.

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