Advanced Search
MyIDEAS: Login

Weakly relative poverty

Contents:

Author Info

  • Ravallion, Martin
  • Chen, Shaohua

Abstract

Prevailing measures of relative poverty put an implausibly high weight on relative deprivation, such that measured poverty does not fall when all incomes grow at the same rate. This stems from the (implicit) assumption in past measures that very poor people incur a negligible cost of social inclusion. That assumption is inconsistent with evidence on the social roles of certain private expenditures in poor settings and with data on national poverty lines. The authors propose a new schedule of"weakly relative"lines that relax this assumption and estimate the implied poverty measures for 116 developing countries. The authors find that there is more relative poverty than past estimates have suggested. In 2005, one half of the population of the developing world lived in relative poverty, half of whom were absolutely poor. The total number of relatively poor rose over 1981-2005, despite falling numbers of absolutely poor. With sustained economic growth, the incidence of relative poverty becomes less responsive to further growth. Slower progress against relative poverty can thus be seen as the"other side of the coin"to success against absolute poverty.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2009/06/22/000158349_20090622100104/Rendered/PDF/WPS4844.pdf
Download Restriction: no

Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4844.

as in new window
Length:
Date of creation: 01 Feb 2009
Date of revision:
Handle: RePEc:wbk:wbrwps:4844

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Email:
Web page: http://www.worldbank.org/
More information through EDIRC

Related research

Keywords: Rural Poverty Reduction; Population Policies; Achieving Shared Growth; Services&Transfers to Poor;

Other versions of this item:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
  2. Alpizar, Francisco & Carlsson, Fredrik & Johansson-Stenman, Olof, 2001. "How Much Do We Care About Absolute Versus Relative Income and Consumption?," Working Papers in Economics 63, University of Gothenburg, Department of Economics.
  3. Fafchamps, Marcel & Shilpi, Forhad, 2008. "Subjective welfare, isolation, and relative consumption," Journal of Development Economics, Elsevier, vol. 86(1), pages 43-60, April.
  4. Branko Milanovic, 2008. "Qat Expenditures in Yemen and Djibouti: An Empirical Analysis," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 17(5), pages 661-687, November.
  5. Geeta Kingdon & John Knight, 2005. "Community, Comparisons and Subjective Well-being in a Divided Society," Working Papers 05095, University of Cape Town, Development Policy Research Unit.
  6. Luuk Van Kempen, 2004. "Are the poor willing to pay a premium for designer labels? a field experiment in Bolivia," Oxford Development Studies, Taylor & Francis Journals, vol. 32(2), pages 205-224.
  7. Ravallion, Martin & Lokshin, Michael, 2002. "Self-rated economic welfare in Russia," European Economic Review, Elsevier, vol. 46(8), pages 1453-1473, September.
  8. Lars Osberg & Kuan Xu, 2007. "How Should We Measure Poverty in a Changing World? Methodological Issues and Chinese Case Study," Department of Economics at Dalhousie University working papers archive rderevision9, Dalhousie, Department of Economics.
  9. Blanchflower, David G. & Oswald, Andrew J., 2001. "Well-Being Over Time in Britain and the USA," The Warwick Economics Research Paper Series (TWERPS) 616, University of Warwick, Department of Economics.
  10. Angus Deaton & Alan Heston, 2009. "Understanding PPPs and PPP-based national accounts," Working Papers 1186, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  11. Andrew E. Clark and Andrew J. Oswald, . "Satisfaction and Comparison Income," Economics Discussion Papers 419, University of Essex, Department of Economics.
  12. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
  13. Luttmer, Erzo F. P., 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," Working Paper Series rwp04-029, Harvard University, John F. Kennedy School of Government.
  14. J. Solnick, Sara & Hemenway, David, 1998. "Is more always better?: A survey on positional concerns," Journal of Economic Behavior & Organization, Elsevier, vol. 37(3), pages 373-383, November.
  15. Frank, Robert H, 1997. "The Frame of Reference as a Public Good," Economic Journal, Royal Economic Society, vol. 107(445), pages 1832-47, November.
  16. Ravallion, Martin & Chen, Shaohua & Sangraula, Prem, 2008. "Dollar a day revisited," Policy Research Working Paper Series 4620, The World Bank.
  17. Kilpatrick, Robert W, 1973. "The Income Elasticity of the Poverty Line," The Review of Economics and Statistics, MIT Press, vol. 55(3), pages 327-32, August.
  18. Fehr, Ernst & Schmidt, Klaus M., 1999. "A theory of fairness, competition, and cooperation," Munich Reprints in Economics 20650, University of Munich, Department of Economics.
  19. Hopkins, Ed, 2008. "Inequality, Happiness and Relative Concerns: What Actually is their Relationship?," SIRE Discussion Papers 2008-01, Scottish Institute for Research in Economics (SIRE).
  20. Bruce E. Hansen, 1996. "Sample Splitting and Threshold Estimation," Boston College Working Papers in Economics 319., Boston College Department of Economics, revised 12 May 1998.
  21. Ravallion, Martin & Lokshin, Michael, 2010. "Who cares about relative deprivation?," Journal of Economic Behavior & Organization, Elsevier, vol. 73(2), pages 171-185, February.
  22. Rao, Vijayendra, 2001. "Poverty and public celebrations in rural India," Policy Research Working Paper Series 2528, The World Bank.
  23. van de Stadt, Huib & Kapteyn, Arie & van de Geer, Sara, 1985. "The Relativity of Utility: Evidence from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 67(2), pages 179-87, May.
  24. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July.
  25. Oswald, Andrew, 1997. "Happiness and Economic Performance," The Warwick Economics Research Paper Series (TWERPS) 478, University of Warwick, Department of Economics.
  26. Lanjouw, Peter & Ravallion, Martin & DEC, 1994. "Poverty and household size," Policy Research Working Paper Series 1332, The World Bank.
  27. Foster, James E & Shorrocks, Anthony F, 1991. "Subgroup Consistent Poverty Indices," Econometrica, Econometric Society, vol. 59(3), pages 687-709, May.
  28. 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.
  29. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July.
  30. 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.
  31. De MESNARD, Louis, 2007. "Poverty reduction: the paradox of the endogenous poverty line," LEG - Document de travail - Economie 2007-05, LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne.
  32. Rebecca M. Blank, 2008. "Presidential address: How to improve poverty measurement in the United States," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(2), pages 233-254.
  33. Ravallion, Martin & Datt, Gaurav & van de Walle, Dominique, 1991. "Quantifying Absolute Poverty in the Developing World," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(4), pages 345-61, December.
  34. Robert Ackland & Steve Dowrick & Benoit Freyens, 2013. "Measuring Global Poverty: Why PPP Methods Matter," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 813-824, July.
  35. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Vincenzo Lombardo, 2012. "Social inclusion and the emergence of development traps," Discussion Papers 13_2012, CRISEI, University of Naples "Parthenope", Italy.
  2. Lokshin, M. & Yemtsov, R., 2013. "Farewell to Destitution?," Journal of the New Economic Association, New Economic Association, vol. 18(2), pages 158-161.
  3. Vincenzo Lombardo, 2012. "Relative consumption and poverty traps," Discussion Papers 11_2012, CRISEI, University of Naples "Parthenope", Italy.
  4. Chen, Xi, 2013. "Relative Deprivation in China," MPRA Paper 48582, University Library of Munich, Germany.
  5. Andos Juhász, 2012. "A Satisfaction-Driven Poverty Indicator: A Bustle around the Poverty Line," SOEPpapers on Multidisciplinary Panel Data Research 461, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Timothy M. Smeeding, 2009. "New comparative measures of income, material deprivation, and well-being," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(4), pages 745-752.
  7. van der Mensbrugghe, Dominique & Osorio Rodarte, Israel & Burns, Andrew & Baffes, John, 2009. "How to feed the world in 2050: Macroeconomic environment, commodity markets - A longer temr outlook," MPRA Paper 19019, University Library of Munich, Germany.
  8. Marchand, Joseph, 2014. "The Distributional Impacts of an Energy Boom in Western Canada," CLSSRN working papers clsrn_admin-2014-28, Vancouver School of Economics, revised 16 Jun 2014.
  9. Dartanto, Teguh & Otsubo, Shigeru, 2013. "Measurements and Determinants of Multifaceted Poverty:Absolute, Relative, and Subjective Poverty in Indonesia," Working Papers 54, JICA Research Institute.
  10. Ugo Gentilini & Andy Sumner, 2012. "Poverty Where People Live: What do National Poverty Lines Tell us about Global Poverty?," Working Papers 98, International Policy Centre for Inclusive Growth.
  11. Richard V. Burkhauser, 2009. "Deconstructing European poverty measures: What relative and absolute scales measure," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(4), pages 715-725.
  12. James Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later," Journal of Economic Inequality, Springer, vol. 8(4), pages 491-524, December.
  13. Dhongde, Shatakshee & Minoiu, Camelia, 2013. "Global Poverty Estimates: A Sensitivity Analysis," World Development, Elsevier, vol. 44(C), pages 1-13.
  14. Vincenzo Lombardo, 2013. "Relative consumption and human capital accumulation," Economics Bulletin, AccessEcon, vol. 33(2), pages 1091-1100.
  15. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  16. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:4844. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.