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The Measurement Of Poverty With Geographical And Intertemporal Price Dispersion. Evidence From Rwanda

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Author Info
Christophe Muller () (Universidad de Alicante)

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Abstract

It is not known to what extent welfare measures result from seasonal and geographical price differences rather than from differences in living standards across households. Using data from Rwanda in 1983, we show that the change in mean living standard indicators caused by local and seasonal price deflation is moderately significant at every quarter. By contrast, the differences in poverty measures caused by this deflation can be considerable, for chronic as well as transient or seasonal poverty indicators. Thus, poverty monitoring and anti-poverty targeting can be badly affected by inaccurate deflation of living standard data. Moreover, when measuring seasonal poverty, the deflation based on regional prices instead of local prices only partially corrects for spatial price dispersion. Using annual local prices instead of quarterly local prices only yields a partial deflation, which distorts the measure of poverty fluctuations across seasons and biases estimates of annual and chronic poverty.

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Publisher Info
Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2005-11.

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Length: 33 pages
Date of creation: Mar 2005
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Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2005-11

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Keywords: Measurement and Analysis of Poverty; Income Distribution; Personal Income Distribution;

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Find related papers by JEL classification:
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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  1. Muller, Christophe, 2002. "Prices and living standards: evidence for Rwanda," Journal of Development Economics, Elsevier, vol. 68(1), pages 187-203, June. [Downloadable!] (restricted)
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    Other versions:
  3. Deaton, A., 1990. "Price Elasticities From Surveys Data: Extensions And Indonesian Results," Papers 69, World Bank - Living Standards Measurement.
    Other versions:
  4. Deaton, Angus, 1988. "Quality, Quantity, and Spatial Variation of Price," American Economic Review, American Economic Association, vol. 78(3), pages 418-30, June. [Downloadable!] (restricted)
    Other versions:
  5. Deaton, Angus, 1998. "Getting Prices Right: What Should Be Done?," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 37-46, Winter. [Downloadable!] (restricted)
  6. Angus Deaton & Alessandro Tarozzi, 2000. "Prices and poverty in India," Working Papers 213, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies.. [Downloadable!]
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  14. Lipton, Michael & Ravallion, Martin, 1993. "Poverty and policy," Policy Research Working Paper Series 1130, The World Bank. [Downloadable!]
    Other versions:
    • 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)
  15. Stevens, Ann Huff, 1994. "The Dynamics of Poverty Spells: Updating Bane and Ellwood," American Economic Review, American Economic Association, vol. 84(2), pages 34-37, May. [Downloadable!] (restricted)
  16. Deaton, A. & Grosh, M., 1998. "Consumption," Papers 191, Princeton, Woodrow Wilson School - Development Studies.
  17. Christophe Muller, 2004. "The Valuation Of Non-Monetary Consumption," Working Papers. Serie AD 2004-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  18. Kakwani, Nanak & Hill, Robert J., 2002. "Economic theory of spatial cost of living indices with application to Thailand," Journal of Public Economics, Elsevier, vol. 86(1), pages 71-97, October. [Downloadable!] (restricted)
  19. Grootaert, Christiaan & Kanbur, Ravi, 1994. "A New Regional Price Index for Cote d'Ivoire Using Data from the International Comparisons Project," Journal of African Economies, Oxford University Press, vol. 3(1), pages 114-41, April.
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  22. Jalan, Jyotsna & Ravallion, Martin, 1998. "Transient Poverty in Postreform Rural China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 338-357, June. [Downloadable!] (restricted)
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  25. Andre, Catherine & Platteau, Jean-Philippe, 1998. "Land relations under unbearable stress: Rwanda caught in the Malthusian trap," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 1-47, January. [Downloadable!] (restricted)
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