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How to Monitor Poverty for the Millennium Development Goals

Author

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  • Angus Deaton

Abstract

I consider two issues concerning how to monitor global poverty for the Millennium Development Goals, the selection of poverty lines, and the data sources for monitoring poverty over time. I discuss the choice of a single international line, converted using purchasing power parity (PPP) exchange rates, versus the use of country- specific poverty lines. I note the difficulties in constructing PPP exchange rates but argue in favor of a single international line, converted at PPP rates, which would be regularly updated using domestic price indexes. Re-basing, using updated PPP rates, would be done infrequently. For example, if the global poverty numbers were estimated annually, the PPP rates might be updated once a decade. In any case, it is important that the poverty estimates be calculated much more frequently than the PPP rates are revised. I discuss whether monitoring should be performed using national accounts data on income or consumption, supplemented by distributional data so as to make inferences about poverty, or using data from household survey data. I argue that data from the national accounts are not suitable for measuring poverty and that their use requires assumptions that are unlikely to hold. In particular, monitoring poverty through the national accounts runs the risk of pre- judging important issues that are properly the subject of measurement, not assumption, such as the extent to which aggregate growth benefits the poor. I argue that poverty should be directly measured using household survey data, and I discuss what needs to be done to enable such monitoring to be placed on a sounder basis.

Suggested Citation

  • Angus Deaton, 2003. "How to Monitor Poverty for the Millennium Development Goals," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 4(3), pages 353-378.
  • Handle: RePEc:taf:jhudca:v:4:y:2003:i:3:p:353-378
    DOI: 10.1080/1464988032000125746
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    Cited by:

    1. Leonardo Gasparini & Matías Horenstein & Sergio Olivieri, 2006. "Economic Polarisation in Latin America and the Caribbean: What do Household Surveys Tell Us?," CEDLAS, Working Papers 0038, CEDLAS, Universidad Nacional de La Plata.
    2. World Bank, 2005. "Burkina Faso : Reducing Poverty Through Sustained Equitable Growth, Poverty Assessment," World Bank Other Operational Studies 8618, The World Bank.
    3. Leonardo Gasparini & Federico Gutiérrez & Leopoldo Tornarolli, 2007. "Growth And Income Poverty In Latin America And The Caribbean: Evidence From Household Surveys," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(2), pages 209-245, June.
    4. Larru, Jose Maria, 2006. "La ayuda al desarrollo: ¿reduce la pobreza?
      [Foreign Aid: reduce poverty? (in Spanish)]
      ," MPRA Paper 2341, University Library of Munich, Germany.
    5. Ugo Gentilini & Patrick Webb, 2005. "How Are We Doing on Poverty and Hunger Reduction?: A New Measure of Country-Level Progress," Working Papers in Food Policy and Nutrition 31, Friedman School of Nutrition Science and Policy.
    6. Pansini, Rosaria Vega, 2004. "La Fissazione della International Poverty Line: una nuova proposta applicata al Vietnam
      [Setting a new International Poverty Line: a new proposal applied to Vietnam]
      ," MPRA Paper 4923, University Library of Munich, Germany.
    7. Martín Cicowiez & Luciano Di Gresia & Leonardo Gasparini, 2007. "Políticas Públicas y Objetivos de Desarrollo del Milenio en la Argentina," CEDLAS, Working Papers 0056, CEDLAS, Universidad Nacional de La Plata.
    8. Kanbur, Ravi, 2004. "Growth, Inequality And Poverty: Some Hard Questions," Working Papers 127133, Cornell University, Department of Applied Economics and Management.
    9. Sanjay G. Reddy & Rahul Lahoti, 2015. "$1.90 Per Day: What Does it Say?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 189, Courant Research Centre PEG.
    10. repec:spr:soinre:v:136:y:2018:i:3:d:10.1007_s11205-017-1620-6 is not listed on IDEAS
    11. Santiago Garganta & Leonardo Gasparini & Mariana Marchionni & Mariano Tappatá, 2017. "The Effect of Cash Transfers on Fertility: Evidence from Argentina," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 36(1), pages 1-24, February.
    12. François Bourguignon, 2015. "Appraising income inequality databases in Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(4), pages 557-578, December.
    13. Camelia Minoiu & Sanjay Reddy, 2008. "Kernel Density Estimation Based on Grouped Data; The Case of Poverty Assessment," IMF Working Papers 08/183, International Monetary Fund.
    14. Charles Meth, 2004. "Half Measures: The ANC's Unemployment and Poverty Reduction Goals," Working Papers 04089, University of Cape Town, Development Policy Research Unit.
    15. Sanjeev Gupta & Catherine A Pattillo & Kevin J Carey, 2005. "Sustaining Growth Accelerations and Pro-Poor Growth in Africa," IMF Working Papers 05/195, International Monetary Fund.
    16. Leonardo Gasparini & Guillermo Cruces & Leopoldo Tornarolli & Mariana Marchionni, 2009. "A Turning Point? Recent Developments on Inequality in Latin America and the Caribbean," CEDLAS, Working Papers 0081, CEDLAS, Universidad Nacional de La Plata.
    17. Juan Carlos Chavez-Martin del Campo, 2008. "Poverty Goals," EconoQuantum, Revista de Economia y Negocios, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 4(2), pages 27-34, Enero-Jun.
    18. Javier Alejo & Santiago Garganta, 2014. "Pobreza Crónica y Transitoria: Evidencia para Argentina 1997-2012," CEDLAS, Working Papers 0175, CEDLAS, Universidad Nacional de La Plata.
    19. Gentilini, Ugo & Webb, Patrick, 2008. "How are we doing on poverty and hunger reduction? A new measure of country performance," Food Policy, Elsevier, vol. 33(6), pages 521-532, December.
    20. Enrique Delamonica, 2016. "Transformational Growth and Poverty: An Evolutionary Approach for Inter-Country and Inter-Temporal Comparisons of Poverty Incidence," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 11(2), pages 387-411, June.
    21. Sudhir Anand & Paul Segal, 2008. "What Do We Know about Global Income Inequality?," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 57-94, March.
    22. De Herdt, Tom, 2004. "Comment mesurer la pauvreté? Une déconstruction méthodologique de l’évolution de la pauvreté monétaire à Kisenso (Kinshasa RDC), 1997-2002," IOB Discussion Papers 2004.06, Universiteit Antwerpen, Institute of Development Policy (IOB).
    23. Juan Carlos Chávez-Martín del Campo & Manuel Gómez, 2009. "Halving poverty in Mexico," Economía Mexicana NUEVA ÉPOCA, , vol. 0(1), pages 107-121, January-J.
    24. Lelli, Sara, 2004. "What Money Can't Buy: The Relevance of Income Redistribution for Functioning Levels," WIDER Working Paper Series 041, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Poverty; Monitoring; Measurement; Purchasing Power Parity; National Accounts; Household Surveys;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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