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A Behaviour-based Approach to the Estimation of Poverty in India

Author

Listed:
  • Ingvild AlmÃ¥s
  • Anders Kjelsrud
  • Rohini Somanathan

Abstract

Since the late 1970s, the price indices underlying the poverty lines in India have been updated using aggregate indices. Widespread criticism of these indices led to the adoption of a new official methodology in 2011 based on unit values from consumption survey data. We propose an alternative approach that identifies poverty from consumer behaviour, based on the notion that equally poor households spend the same proportion of their incomes on food. Compared with official estimates, we find higher levels of poverty in eastern India, and generally, smaller reductions in poverty from 2005 to 2010. Our poverty numbers are validated by the calorie composition of households around the poverty lines and self-reported hunger.

Suggested Citation

  • Ingvild AlmÃ¥s & Anders Kjelsrud & Rohini Somanathan, 2013. "A Behaviour-based Approach to the Estimation of Poverty in India," CESifo Working Paper Series 4122, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4122
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    References listed on IDEAS

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    Cited by:

    1. Amita Majumder & Ranjan Ray & Sattwik Santra, 2016. "Global and Country Poverty Rates, Welfare Rankings of the Regions and Purchasing Power Parities: How Robust Are the Results?," Monash Economics Working Papers 11-16, Monash University, Department of Economics.
    2. Rémi BAZILLIER & Victoire GIRARD, 2017. "The gold digger and the machine. Evidence on the distributive effect of the artisanal and industrial gold rushes in Burkina Faso," LEO Working Papers / DR LEO 2545, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    3. Majumder,Amita & Ray,Ranjan & Santra,Sattwik, 2015. "Preferences, purchasing power parity, and inequality : analytical framework, propositions, and empirical evidence," Policy Research Working Paper Series 7395, The World Bank.

    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F01 - International Economics - - General - - - Global Outlook
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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