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Poverty Lines as Context Deflators: A Method to Account for Regional Diversity with Application to the Democratic Republic of Congo

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  • Wim Marivoet
  • Tom De Herdt

Abstract

type="main"> This paper proposes a particular methodology to render budget data more comparable over highly diverse regions. More specifically, a set of regional poverty lines will be derived and employed as deflators to correct household expenditures for spatial differences in prices and needs. The quality of these deflators depends on the extent to which the underlying poverty lines adhere to the principles of consistency and specificity. Central to reconciling both principles in practice is our pursuit for austerity in setting poverty thresholds as well as the view that differences in social norms mainly reflect differences in social inclusion needs. The particularity of the proposed method compared to standard practice lies in the combination of: (i) the pronounced subdivision in socio-economic strata; (ii) the use of a differential calorie threshold per sector; (iii) the introduction of protein intake; (iv) the derivation of a minimal house rent; and (v) the use of an austere non-food/non-housing allowance. The impact of this method is illustrated using a budget survey of the Democratic Republic of Congo.

Suggested Citation

  • Wim Marivoet & Tom De Herdt, 2015. "Poverty Lines as Context Deflators: A Method to Account for Regional Diversity with Application to the Democratic Republic of Congo," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(2), pages 329-352, June.
  • Handle: RePEc:bla:revinw:v:61:y:2015:i:2:p:329-352
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    File URL: http://hdl.handle.net/10.1111/roiw.12091
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    References listed on IDEAS

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    1. Channing Arndt & Kenneth R. Simler, 2007. "Consistent poverty comparisons and inference," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 133-139, September.
    2. Martin Ravallion & Shaohua Chen, 2011. "Weakly Relative Poverty," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1251-1261, November.
    3. Martin Ravallion & Michael Lokshin, 2006. "Testing Poverty Lines," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(3), pages 399-421, September.
    4. Sen, Amartya, 1983. "Poor, Relatively Speaking," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 153-169, July.
    5. Shatakshee Dhongde & Camelia Minoiu, 2010. "Global poverty estimates: Present and future," Global Development Institute Working Paper Series 13310, GDI, The University of Manchester.
    6. Angus Deaton & Alan Heston, 2010. "Understanding PPPs and PPP-Based National Accounts," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 1-35, October.
    7. Alkire, Sabina, 2002. "Dimensions of Human Development," World Development, Elsevier, vol. 30(2), pages 181-205, February.
    8. 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.
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    Cited by:

    1. Moatsos Michail, 2016. "Global Absolute Poverty: Behind the Veil of Dollars," Journal of Globalization and Development, De Gruyter, vol. 7(2), pages 1-28, December.
    2. Marivoet, Wim, 2016. "Food markets and nutrition in the Democratic Republic of the Congo (2004–2005):," IFPRI discussion papers 1566, International Food Policy Research Institute (IFPRI).
    3. van den Boom,Bart & Halsema,Alex & Molini,Vasco, 2015. "Are we confusing poverty with preferences ?," Policy Research Working Paper Series 7247, The World Bank.

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