More relatively-poor people in a less absolutely-poor world
AbstractRelative deprivation, shame and social exclusion can matter to the welfare of people everywhere. The authors argue that such social effects on welfare call for a reconsideration of how we assess global poverty, but they do not support standard measures of relative poverty. The paper argues instead for using a weakly-relative measure as the upper-bound complement to the lower-bound provided by a standard absolute measure. New estimates of global poverty are presented, drawing on 850 household surveys spanning 125 countries over 1981-2008. The absolute line is $1.25 a day at 2005 prices, while the relative line rises with the mean, at a gradient of 1:2 above $1.25 a day. The authors show that these parameter choices are consistent with cross-country data on national poverty lines. The results indicate that the incidence of both absolute and weakly-relative poverty in the developing world has been falling since the 1990s, but more slowly for the relative measure. While the number of absolutely poor has fallen, the number of relatively poor has changed little since the 1990s, and is higher in 2008 than 1981.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 6114.
Date of creation: 01 Jul 2012
Date of revision:
Rural Poverty Reduction; Regional Economic Development; Achieving Shared Growth; Services&Transfers to Poor;
Other versions of this item:
- Shaohua Chen & Martin Ravallion, 2013. "More Relatively-Poor People in a Less Absolutely-Poor World," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(1), pages 1-28, 03.
- NEP-ALL-2012-07-14 (All new papers)
- NEP-DEV-2012-07-14 (Development)
- NEP-LTV-2012-07-14 (Unemployment, Inequality & Poverty)
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