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Measuring inequalities: do household surveys paint a realistic picture?

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  • Guénard, Charlotte
  • Mesplé-Somps, Sandrine

Abstract

The paper addresses the issue of the accuracy of standard-of-living measurements using household survey data. First, it highlights the fact that lighter data collection processes in some developing countries have added to measurement errors in consumption and income aggregates measurement errors. The paper reasserts the need to apply reference guidelines to the measurement of household consumption in order to compute comparable distribution indicators across countries and over time. Second, it contends that it is hard to analyze inequality solely from consumption patterns without taking income and savings into account. Two solutions are proposed for the correction of income measurement errors: by using savings declarations and by implementing a multiple imputation procedure. The results are based on a careful analysis of the EPM93 survey of Madagascar whose design is quite close to the LSMS household surveys, and the ENV98 survey of Côte d'Ivoire representative of surveys conducted nowadays in most Sub-Saharan African countries.

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File URL: http://basepub.dauphine.fr/xmlui/bitstream/123456789/5143/1/measuring_inqualities.PDF
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Bibliographic Info

Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/5143.

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Date of creation: 2010
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Publication status: Published in Review of Income and Wealth, 2010, Vol. 56, no. 3. pp. 519-538.Length: 19 pages
Handle: RePEc:dau:papers:123456789/5143

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Keywords: household survey; inequality; missing data;

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References

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  1. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
  2. T. Paul Schultz, 1998. "Inequality in the Distribution of Personal Income in the World: How it is Changing and Why," Working Papers, Economic Growth Center, Yale University 784, Economic Growth Center, Yale University.
  3. Gibson, John & Huang, Jikun & Rozelle, Scott, 2001. "Improving Estimates Of Inequality And Poverty From Urban China'S Household Income And Expenditure Survey," Working Papers, University of California, Davis, Department of Agricultural and Resource Economics 11989, University of California, Davis, Department of Agricultural and Resource Economics.
  4. Shaohua Chen & Martin Ravallion, 2004. "How Have the World's Poorest Fared since the Early 1980s?," World Bank Research Observer, World Bank Group, World Bank Group, vol. 19(2), pages 141-169.
  5. T. Paul Schultz, 1998. "Inequality in the distribution of personal income in the world: How it is changing and why," Journal of Population Economics, Springer, Springer, vol. 11(3), pages 307-344.
  6. Angus Deaton & Salman Zaidi, 2002. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," World Bank Publications, The World Bank, number 14101, August.
  7. de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2007. "Measuring microenterprise profits : don't ask how the sausage is made," Policy Research Working Paper Series 4229, The World Bank.
  8. Christian Loisy, 1999. "L'épargne des ménages de 1984 à 1995 : disparité et diversité," Économie et Statistique, Programme National Persée, Programme National Persée, vol. 324(1), pages 113-133.
  9. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, Econometric Society, vol. 47(1), pages 153-61, January.
  10. Simon Appleton, 2003. "Regional or National Poverty Lines? The Case of Uganda in the 1990s," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 12(4), pages 598-624, December.
  11. Angus Deaton & Valerie Kozel, 2005. "Data and Dogma: The Great Indian Poverty Debate," World Bank Research Observer, World Bank Group, World Bank Group, vol. 20(2), pages 177-199.
  12. Chesher, Andrew & Schluter, Christian, 2002. "Welfare Measurement and Measurement Error," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 69(2), pages 357-78, April.
  13. Mistiaen, Johan A. & Ravallion, Martin, 2003. "Survey compliance and the distribution of income," Policy Research Working Paper Series 2956, The World Bank.
  14. Angus Deaton, 2005. "ERRATUM: Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 395-395, May.
  15. Lee Lillard & James P. Smith & Finis Welch, 2004. "What Do We Really Know About Wages: The Importance of Nonreporting and Census Imputation," Labor and Demography, EconWPA 0404005, EconWPA.
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Cited by:
  1. Derek Yu, 2013. "Some factors influencing the comparability and reliability of poverty estimates across household surveys," Working Papers 03/2013, Stellenbosch University, Department of Economics.

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