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Measuring poverty using qualitative perceptions of welfare

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  • Pradhan, Menno
  • Ravallion, Martin

Abstract

The authors show how subjective poverty lines can be derived using simple qualitative assessments of perceived consumption adequacy, based on a household survey. Respondents were asked whether their consumption of food, housing, and clothing was adequate for their family's needs. The author's approach, by identifying the subjective poverty line without the usual"minimum-income question,"offers wide applications in developing country settings. They implement it using survey data for Jamaica and Nepal. The implied subjective poverty lines are robust to alternative methods of dealing with other components of consumption, for which the subjective"adequacy"question was not asked. The aggregate poverty rates based on subjective poverty lines come close to those based on independent"objective"poverty lines. There are notable differences, however, when geographic and demographic poverty profiles are constructed.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2011.

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Date of creation: 30 Nov 1998
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Handle: RePEc:wbk:wbrwps:2011

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Related research

Keywords: Health Monitoring&Evaluation; Environmental Economics&Policies; Public Health Promotion; Services&Transfers to Poor; Poverty Reduction Strategies; Poverty Assessment; Poverty Lines; Environmental Economics&Policies; Inequality; Achieving Shared Growth;

References

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  1. Pollak, Robert A., 1991. "Welfare comparisons and situation comparisons," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 31-48, October.
  2. Goedhart, T. & Halberstadt, V. & Praag, B.M.S. van & Kapteyn, A.J., 1977. "The poverty line: Concept and measurement," Open Access publications from Tilburg University urn:nbn:nl:ui:12-361898, Tilburg University.
  3. Kapteyn, Arie, 1994. "The Measurement of Household Cost Functions: Revealed Preference versus Subjective Measures," Journal of Population Economics, Springer, vol. 7(4), pages 333-50, November.
  4. Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, vol. 69(2), pages 216-21, May.
  5. Arie Kapteyn & Peter Kooreman & Rob Willemse, 1988. "Some Methodological Issues in the Implementation of Subjective Poverty Definitions," Journal of Human Resources, University of Wisconsin Press, vol. 23(2), pages 222-242.
  6. Stanovnik, Tine, 1992. "Perception of poverty and income satisfaction : An empirical analysis of Slovene households," Journal of Economic Psychology, Elsevier, vol. 13(1), pages 57-69, March.
  7. Kakwani, Nanak, 1993. "Statistical Inference in the Measurement of Poverty," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 632-39, November.
  8. Diane Colasanto & Arie Kapteyn & Jacques van der Gaag, 1984. "Two Subjective Definitions of Poverty: Results from the Wisconsin Basic Needs Study," Journal of Human Resources, University of Wisconsin Press, vol. 19(1), pages 127-138.
  9. 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.
  10. Ravallion, Martin & Bidani, Benu, 1993. "How robust is a poverty profile?," Policy Research Working Paper Series 1223, The World Bank.
  11. Lanjouw, Peter & Ravallion, Martin & DEC, 1994. "Poverty and household size," Policy Research Working Paper Series 1332, The World Bank.
  12. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
  13. Arie Kapteyn & Sara van de Geer & Huib van de Stadt, 1985. "The Impact of Changes in Income and Family Composition on Subjective Measures of Well-Being," NBER Chapters, in: Horizontal Equity, Uncertainty, and Economic Well-Being, pages 35-68 National Bureau of Economic Research, Inc.
  14. Grosh, M.E. & Glewwe, P., 1995. "A Guide to Living Standards Measurement Study Surveys and their Data Sets," Papers 120, World Bank - Living Standards Measurement.
  15. de Vos, Klaas & Garner, Thesia I, 1991. "An Evaluation of Subjective Poverty Definitions: Comparing Results from the U.S. and the Netherlands," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(3), pages 267-85, September.
  16. Kapteyn, A.J., 1994. "The measurement of household cost functions: Revealed preference versus subjective measures," Discussion Paper 1994-3, Tilburg University, Center for Economic Research.
  17. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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Citations

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Cited by:
  1. Mussa, Richard, 2009. "Impact of fertility on objective and subjective poverty in Malawi," MPRA Paper 16089, University Library of Munich, Germany.
  2. Christophe Muller, 2005. "Defining Poverty Lines As A Fraction Of Central Tendency," Working Papers. Serie AD 2005-13, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  3. Lanjouw, Peter & Milanovic, Branko & Paternostro, Stefano, 1998. "Poverty and the economic transition : how do changes in economies of scale affect poverty rates for different households?," Policy Research Working Paper Series 2009, The World Bank.
  4. Razafindrakoto, Mireille & Roubaud, François, 2005. "Les multiples facettes de la pauvreté dans un pays en développement : Le cas de la capitale malgache," Economics Papers from University Paris Dauphine 123456789/4745, Paris Dauphine University.
  5. Mireille Razafindrakoto & François Roubaud, 2005. "The Many Facets of Poverty in a Developing Country. The Case of The Madagascan Capital," Economie et Statistique, Institut National de la Statistique et des Etudes Economiques, vol. 383, pages 131-155, December.
  6. Khandker, Shahidur R. & Barnes, Douglas F. & Samad, Hussain A., 2010. "Energy poverty in rural and urban India : are the energy poor also income poor ?," Policy Research Working Paper Series 5463, The World Bank.
  7. Ravallion, Martin & Lokshin, Michael, 2000. "Identifying welfare effects from subjective questions," Policy Research Working Paper Series 2301, The World Bank.
  8. Barnes, Douglas F. & Khandker, Shahidur R. & Samad, Hussain A., 2010. "Energy access, efficiency, and poverty : how many households are energy poor in Bangladesh ?," Policy Research Working Paper Series 5332, The World Bank.
  9. Christiaensen, Luc J.M. & Boisvert, Richard N., 2000. "On Measuring Household Food Vulnerability: Case Evidence from Northern Mali," Working Papers 127676, Cornell University, Department of Applied Economics and Management.
  10. Paul Shaffer, 2008. "New Thinking on Poverty: Implications for Globalisation and Poverty Reduction Strategies," Working Papers 65, United Nations, Department of Economics and Social Affairs.
  11. Ravallion, Martin & Lokshin, Michael, 1999. "Subjective economic welfare," Policy Research Working Paper Series 2106, The World Bank.
  12. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Medición y análisis de la pobreza
    [Poverty Measurement and Analysis]
    ," MPRA Paper 10491, University Library of Munich, Germany.
  13. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Измерение И Анализ Бедности
    [Poverty Measurement and Analysis]
    ," MPRA Paper 10492, University Library of Munich, Germany.
  14. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Mesure et analyse de la pauvreté
    [Poverty Measurement and Analysis]
    ," MPRA Paper 10490, University Library of Munich, Germany.

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