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On the utility consistency of poverty lines

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Author Info
Ravallion, Martin
Lokshin, Michael

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Abstract

Although poverty lines are widely used as deflators for inter-group welfare comparisons, their internal consistency is rarely given close scrutiny. A priori considerations suggest that commonly used methods cannot be relied on to yield poverty lines that are consistent in terms of utility, or for capabilities more generally. The theory of revealed preference offers testable implications of utility consistency for"poverty baskets"under homogeneous preferences. A case study of Russia's official poverty lines reveals numerous violations of revealed preference criteria-violations that are not solely attributable to heterogeneity in preferences associated with climatic differences.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3157.

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Date of creation: 01 Oct 2003
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Handle: RePEc:wbk:wbrwps:3157

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Keywords: Health Information&Communications Technologies; Environmental Economics&Policies; Poverty Reduction Strategies; Services&Transfers to Poor; Health Indicators; Poverty Lines; Poverty Assessment; Environmental Economics&Policies; Achieving Shared Growth; Urban Partnerships&Poverty;

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  1. Paul, Satya, 1989. "A model of constructing the poverty line," Journal of Development Economics, Elsevier, vol. 30(1), pages 129-144, January. [Downloadable!] (restricted)
  2. Sen, Amartya, 1979. "The Welfare Basis of Real Income Comparisons: A Survey," Journal of Economic Literature, American Economic Association, vol. 17(1), pages 1-45, March. [Downloadable!] (restricted)
  3. Ravallion, Martin & Bidani, Benu, 1994. "How Robust Is a Poverty Profile?," World Bank Economic Review, Oxford University Press, vol. 8(1), pages 75-102, January.
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  4. Ravallion, Martin & Sen, Binayak, 1996. "When Method Matters: Monitoring Poverty in Bangladesh," Economic Development and Cultural Change, University of Chicago Press, vol. 44(4), pages 761-92, July.
  5. Blackorby, Charles & Donaldson, David, 1987. "Welfare ratios and distributionally sensitive cost-benefit analysis," Journal of Public Economics, Elsevier, vol. 34(3), pages 265-290, December. [Downloadable!] (restricted)
  6. Menno Pradhan & Martin Ravallion, 2000. "Measuring Poverty Using Qualitative Perceptions Of Consumption Adequacy," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 462-471, August. [Downloadable!] (restricted)
  7. Greer, Joel & Thorbecke, Erik, 1986. "A methodology for measuring food poverty applied to Kenya," Journal of Development Economics, Elsevier, vol. 24(1), pages 59-74, November. [Downloadable!] (restricted)
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  1. Simler. Kenneth R. & Arndt, Channing, 2006. "Poverty comparisons with absolute poverty lines estimated from survey data," FCND discussion papers 211, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  2. ALi Abdel Gadir Ali, . "Poverty in the Arab Region: A Selective Review," API-Working Paper Series 0402, Arab Planning Institute - Kuwait, Information Center. [Downloadable!]
  3. Arndt, Channing & Simler, Kenneth R., 2005. "Estimating utility-consistent poverty lines," FCND discussion papers 189, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  4. Indraneel Dasgupta & Ravi Kanbur, 2005. "Community and anti-poverty targeting," Journal of Economic Inequality, Springer, vol. 3(3), pages 281-302, December. [Downloadable!] (restricted)
  5. Julia Johannsen & Manfred Zeller & Stephan Klasen, 2007. "The capability dilemma in operational poverty assessment," Ibero America Institute for Econ. Research (IAI) Discussion Papers 159, Ibero-America Institute for Economic Research. [Downloadable!]
  6. Sanjaya Acharya, 2004. "Measuring and Analyzing Poverty," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 1(2), pages 195-215, December. [Downloadable!]
  7. repec:dia:wpaper:dt200601 is not listed on IDEAS
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