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Eating like which “Joneses?” an Iterative Solution to the Choice of a Poverty Line “Reference Group”

Author

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  • Menno Pradhan
  • Asep Suryahadi
  • Sudarno Sumarto
  • Lant Pritchett

Abstract

A standard method for calculating poverty lines (e.g. Ravallion, 1994) is not fully specified. The choice of the “reference population” for determining food baskets is left to the decision of the individual analyst. However, the poverty line can be quite sensitive to the real income of the reference group because the “quality” of the food basket—measured as the food expenditures per calorie—rises sharply with income. We propose that the reference group be centered on the poverty line. To address the obvious circularity problem in choosing a reference population at the poverty line to define the poverty line, we use an iterative approach. This iterative method provides a methodological anchor that fixes the reference group.

Suggested Citation

  • Menno Pradhan & Asep Suryahadi & Sudarno Sumarto & Lant Pritchett, 2001. "Eating like which “Joneses?” an Iterative Solution to the Choice of a Poverty Line “Reference Group”," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(4), pages 473-487, December.
    • Handle: RePEc:bla:revinw:v:47:y:2001:i:4:p:473-487
    DOI: 10.1111/1475-4991.00030
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    Cited by:

    1. Adama BAH, 2013. "Estimating Vulnerability to Poverty using Panel data: Evidence from Indonesia," Working Papers 201325, CERDI.
    2. Bhattacharyya, Sambit & Resosudarmo, Budy P., 2015. "Growth, Growth Accelerations, and the Poor: Lessons from Indonesia," World Development, Elsevier, vol. 66(C), pages 154-165.
    3. Sumarto, Sudarno & Suryahadi, Asep, 2004. "The Role of Agricultural Growth in Poverty Reduction in Indonesia," MPRA Paper 60724, University Library of Munich, Germany.
    4. Asep Suryahadi & Wenefrida Widyanti & Sudarno Sumarto, 2003. "Short-term poverty dynamics in rural Indonesia during the economic crisis," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(2), pages 133-144.
    5. Jan Priebe, 2014. "Official Poverty Measurement in Indonesia since 1984: A Methodological Review," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 50(2), pages 185-205, August.
    6. Andrew Grodner & Thomas J. Kniesner, 2008. "Labor supply with social interactions: econometric estimates and their tax policy implications," Research in Labor Economics, in: Work, Earnings and Other Aspects of the Employment Relation, pages 1-23, Emerald Group Publishing Limited.
    7. Andy Sumner & Peter Edward, 2013. "From Low Income, High Poverty to High-Income, No Poverty? An Optimistic View of the Long-Run Evolution of Poverty in Indonesia By International Poverty Lines, 1984–2030," Working Papers in Economics and Development Studies (WoPEDS) 201310, Department of Economics, Padjadjaran University, revised Jun 2013.
    8. Jing Dai & Stefan Sperlich & Walter Zucchini, 2011. "Estimating and Predicting Household Expenditures and Income Distributions," MAGKS Papers on Economics 201147, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    9. Thomas Otter, 2009. "Micro Level Estimation of Income - Simulated welfare mapping (poverty maps) for Paraguay 1992 and 2002," Ibero America Institute for Econ. Research (IAI) Discussion Papers 187, Ibero-America Institute for Economic Research.
    10. World Bank, 2010. "Paraguay Poverty Assessment : Determinants and Challenges for Poverty Reduction [Paraguay - Estudio de pobreza : determinantes y desafíos para la reduccion de la pobreza]," World Bank Publications - Reports 12585, The World Bank Group.
    11. Adama BAH, 2013. "Finding the Best Indicators to Identify the Poor," Working Papers 201324, CERDI.
    12. Andy Sumner, 2013. "The Evolution Of Education And Health Poverty During Economic Development:The Case Of Indonesia, 1991–2007," Working Papers in Economics and Development Studies (WoPEDS) 201311, Department of Economics, Padjadjaran University, revised May 2013.
    13. Wenefrida Dwi Widyanti & Asep Suryahadi & Sudarno Sumarto & Athia Yumna, "undated". "The Relationship between Chronic Poverty and Household Dynamics: Evidence from Indonesia," Working Papers 339, Publications Department.
    14. Sudarno Sumarto & Daniel Suryadarma & Asep Suryahadi, 2007. "Predicting Consumption Poverty using Non-Consumption Indicators: Experiments using Indonesian Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 81(3), pages 543-578, May.
    15. Asep Suryahadi & Sudarno Sumarto & Lant Pritchett, 2003. "Evolution of Poverty During the Crisis in Indonesia," Asian Economic Journal, East Asian Economic Association, vol. 17(3), pages 221-241, September.
    16. Daniel Suryadarma & Rima Prama Artha & Asep Suryahadi & Sudarno Sumarto, "undated". "A Reassessment of Inequality and Its Role in Poverty Reduction in Indonesia," Working Papers 364, Publications Department.
    17. Sujarwoto, Sujarwoto & Tampubolon, Gindo, 2016. "Spatial inequality and the Internet divide in Indonesia 2010–2012," Telecommunications Policy, Elsevier, vol. 40(7), pages 602-616.
    18. Brun, Martín & Colacce, Maira, 2019. "Medición de la pobreza monetaria en el Uruguay: conceptos, metodologías, evolución y alternativas," Estudios y Perspectivas – Oficina de la CEPAL en Montevideo 44415, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    19. Muhammad Nashihin, 2009. "An examination of methods to estimate poverty line in Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 1(3), pages 161-175, April.

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