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How we measure poverty underestimates its extent and depth

Author

Listed:
  • Edita A. Tan

    (UP School of Economics)

Abstract

The country’s official definition of poverty is based on a threshold income that fails to adequately account for nonfood needs and is unrelated to actual behavior and real choices facing households. The resulting underestimation of the extent of poverty and rate of poverty reduction gives a false sense of comfort to policy-makers. Other sources of data particularly those on nutrition, education, and housing corroborate the existing gap between reality and official measures. After a critical look at existing methods, this paper proposes alternative thresholds of absolute poverty, with special attention to housing, that may provide a more accurate picture of the incidence and extent of the remaining poverty in the country.

Suggested Citation

  • Edita A. Tan, 2017. "How we measure poverty underestimates its extent and depth," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 54(1), pages 94-119, June.
    • Handle: RePEc:phs:prejrn:v:54:y:2017:i:1:p:94-119
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    File URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/951/854
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    References listed on IDEAS

    as
    1. Albert, Jose Ramon G. & David, Clarissa C., 2012. "Primary Education: Barriers to Entry and Bottlenecks to Completion," Discussion Papers DP 2012-07, Philippine Institute for Development Studies.
    2. Jose Ramon Albert & Wilma Molano, 2009. "Estimation of the Food Poverty Line," Development Economics Working Papers 22948, East Asian Bureau of Economic Research.
    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. Kingdon, Geeta Gandhi & Knight, John, 2007. "Community, comparisons and subjective well-being in a divided society," Journal of Economic Behavior & Organization, Elsevier, vol. 64(1), pages 69-90, September.
    5. Alkire, Sabina & Foster, James, 2011. "Counting and multidimensional poverty measurement," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 476-487, August.
    6. Aldi Hagenaars & Klaas de Vos, 1988. "The Definition and Measurement of Poverty," Journal of Human Resources, University of Wisconsin Press, vol. 23(2), pages 211-221.
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    More about this item

    Keywords

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    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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