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On the utility consistency of poverty lines

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  • Ravallion, Martin
  • Lokshin, Michael

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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Bibliographic Info

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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References

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  1. 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.
  2. Kapteyn, A.J. & Kooreman, P. & Willemse, R., 1987. "Some methodological issues in the implementation of subjective poverty definitions," Research Memorandum 245, Tilburg University, Faculty of Economics and Business Administration.
  3. 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.
  4. Ravallion, Martin & Bidani, Benu, 1993. "How robust is a poverty profile?," Policy Research Working Paper Series 1223, The World Bank.
  5. Quentin Wodon, 1997. "Food energy intake and cost of basic needs: Measuring poverty in Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 34(2), pages 66-101.
  6. 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.
  7. 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.
  8. 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.
  9. Paul, Satya, 1989. "A model of constructing the poverty line," Journal of Development Economics, Elsevier, vol. 30(1), pages 129-144, January.
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Citations

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Cited by:
  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).
  2. ALi Abdel Gadir Ali, . "Poverty in the Arab Region: A Selective Review," API-Working Paper Series 0402, Arab Planning Institute - Kuwait, Information Center.
  3. Bersales, Lisa Grace S., 2009. "Issues on the Official Poverty Estimation Methodology in the Philippines: Comparability of Estimates across Space and over Time," Discussion Papers DP 2009-17, Philippine Institute for Development Studies.
  4. Lisa Grace S. Bernales, 2009. "Issues on the Official Poverty Estimation Methodology in the Philippines : Comparability of Estimates across Space and over Time," Development Economics Working Papers 23092, East Asian Bureau of Economic Research.
  5. Dasgupta, Indraneel & Kanbur, Ravi, 2003. "Community And Anti-Poverty Targeting," Working Papers 127774, Cornell University, Department of Applied Economics and Management.
  6. Alfani, Federica & Azzarri, Carlo & d'Errico, Marco & Molini, Vasco, 2012. "Poverty in Mozambique : new evidence from recent household surveys," Policy Research Working Paper Series 6217, The World Bank.
  7. Jose Ramon Albert & Wilma Molano, 2009. "Estimation of the Food Poverty Line," Development Economics Working Papers 22948, East Asian Bureau of Economic Research.
  8. Arndt, Channing & Simler, Kenneth R., 2005. "Estimating utility-consistent poverty lines," FCND briefs 189, International Food Policy Research Institute (IFPRI).
  9. Marcelo Bérgolo & Martín Leites & Gonzalo Salas, 2006. "Privaciones nutricionales : su vínculo con la pobreza y el ingreso monetario," Documentos de Trabajo (working papers) 06-03, Instituto de Economía - IECON.
  10. Lisa Grace S. Bersales, 2009. "Issues on the Official Poverty Estimation Methodology in the Philippines : Comparability of Estimates across Space and Over Time," Development Economics Working Papers 22950, East Asian Bureau of Economic Research.
  11. Kanbur, Ravi & Shaffer, Paul, 2006. "Epistemology, Normative Theory and Poverty Analysis:Implications for Q-Squared in Practice," Working Papers 127034, Cornell University, Department of Applied Economics and Management.
  12. 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.
  13. Albert, Jose Ramon G. & Molano, Wilma, 2009. "Estimation of the Food Poverty Line," Discussion Papers DP 2009-14, Philippine Institute for Development Studies.
  14. Sanjaya Acharya, 2004. "Measuring and Analyzing Poverty," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 1(2), pages 195-215, December.

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