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Determinants of the Growth Semi-Elasticity of Poverty Reduction

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Author Info
Stephan Klasen () (Georg-August-Universität Göttingen / Germany)
Mark Misselhorn ()

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Abstract

In this paper we examine the mathematical relationship between growth and distributional change on absolute (i.e. percentage point) changes in FGT poverty measures assuming a log-normal income distribution, which we argue to be a conceptually superior and more policy-relevant measure than the much used ’regular’ growth elasticity of poverty reduction. We also test the empirical relationship of these semi-elasticities of growth and distributional change on poverty and find them to explain actual changes in poverty very well (in fact, much better than a related study by Bourguignon (2003) that studied the growth elasticity of poverty reduction). This is particularly the case when poverty depth and severity is considered. Using our results helps in interpreting past performance in poverty reduction and will allow a rapid and quite reliable prediction of the impact of growth and distributional change on (absolute) poverty reduction across countries, taking heterogeneity in country circumstances into account.

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Publisher Info
Paper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 176.

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Length: 33 pages
Date of creation: 17 Oct 2008
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Handle: RePEc:got:iaidps:176

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Related research
Keywords: Poverty reduction; growth elasticity; growth semi-elasticity; income distribution;

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Find related papers by JEL classification:
O1 - Economic Development, Technological Change, and Growth - - Economic Development
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
O2 - Economic Development, Technological Change, and Growth - - Development Planning and Policy

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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.:
  1. François Bourguignon, 2002. "The growth elasticity of poverty reduction : explaining heterogeneity across countries and time periods," DELTA Working Papers 2002-03, DELTA (Ecole normale supérieure). [Downloadable!]
  2. Ravallion, Martin & Shaohua Chen, 1996. "What can new survey data tell us about recent changes in distribution and poverty?," Policy Research Working Paper Series 1694, The World Bank. [Downloadable!]
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  3. Kraay, Aart, 2006. "When is growth pro-poor? Evidence from a panel of countries," Journal of Development Economics, Elsevier, vol. 80(1), pages 198-227, June. [Downloadable!] (restricted)
  4. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January. [Downloadable!] (restricted)
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  5. Rati Ram, 2006. "Growth Elasticity of Poverty: Alternative Estimates and a Note of Caution," Kyklos, Blackwell Publishing, vol. 59(4), pages 601-610, November. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Stephan Klasen, 2009. "Levels and Trends in Absolute Poverty in the World: What we know and what we don’t," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 11, Courant Research Centre PEG. [Downloadable!]
  2. Stephan Klasen, 2008. "Poverty, undernutrition, and child mortality: Some inter-regional puzzles and their implicationsfor research and policy," Journal of Economic Inequality, Springer, vol. 6(1), pages 89-115, March. [Downloadable!] (restricted)
    Other versions:
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