A Behaviour-based Approach to the Estimation of Poverty in India
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.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: Poschingerstrasse 5, 81679 Munich|
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pendakur, K., 1999.
"Taking Prices Seriously in the Measurement of Inequality,"
dp99-7, Department of Economics, Simon Fraser University.
- Pendakur, Krishna, 2002. "Taking prices seriously in the measurement of inequality," Journal of Public Economics, Elsevier, vol. 86(1), pages 47-69, October.
- Dora L. Costa, 2001. "Estimating Real Income in the United States from 1888 to 1994: Correcting CPI Bias Using Engel Curves," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1288-1310, December.
- J. Peter Neary, 2004.
"Rationalizing the Penn World Table: True Multilateral Indices for International Comparisons of Real Income,"
American Economic Review,
American Economic Association, vol. 94(5), pages 1411-1428, December.
- J. Peter Neary, 2004. "Rationalising the Penn World Table: True Multilateral Indices for International Comparisons of Real Income," Working Papers 199622, School of Economics, University College Dublin.
- Dickens, Richard & Fry, Vanessa & Pashardes, Panos, 1993. "Non-linearities and Equivalence Scales," Economic Journal, Royal Economic Society, vol. 103(417), pages 359-68, March.
- Timothy Beatty & Erling Røed Larsen, 2005.
"Using Engel curves to estimate bias in the Canadian CPI as a cost of living index,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 38(2), pages 482-499, May.
- Beatty, Timothy K.M. & Larsen, Erling Roed, 2004. "Using Engel Curves To Estimate Bias In The Canadian Cpi As A Cost Of Living Index," Working Papers 15836, University of British Columbia, Food and Resource Economics.
- Garry F. Barrett & Matthew Brzozowski, 2010. "Using Engel Curves to Estimate the Bias in the Australian CPI," The Economic Record, The Economic Society of Australia, vol. 86(272), pages 1-14, 03.
- repec:pri:rpdevs:deaton_tarozzi_prices_poverty.pdf is not listed on IDEAS
- Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, vol. 69(2), pages 216-21, May.
- Richard Blundell & Alan Duncan & Krishna Pendakur, 1998. "Semiparametric estimation and consumer demand," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(5), pages 435-461.
- Susan Olivia & John Gibson, 2013.
"Using Engel curves to measure CPI bias for Indonesia,"
Bulletin of Indonesian Economic Studies,
Taylor & Francis Journals, vol. 49(1), pages 85-101, April.
- Susan Olivia & John Gibson, 2012. "Using Engel Curves to Measure CPI Bias for Indonesia," Working Papers in Economics 12/06, University of Waikato, Department of Economics.
- Susan Olivia & John Gibson, 2012. "Using Engel Curves to Measure CPI Bias for Indonesia," Monash Econometrics and Business Statistics Working Papers 13/12, Monash University, Department of Econometrics and Business Statistics.
- Irineu E. de Carvalho Filho & Marcos Chamon, 2006. "The Myth of Post-Reform Income Stagnation in Brazil," IMF Working Papers 06/275, International Monetary Fund.
- John Gibson & Steven Stillman & Trinh Le, 2004.
"CPI Bias and Real Living Standards in Russia During the Transition,"
Working Papers in Economics
04/02, University of Waikato, Department of Economics.
- Gibson, John & Stillman, Steven & Le, Trinh, 2008. "CPI bias and real living standards in Russia during the transition," Journal of Development Economics, Elsevier, vol. 87(1), pages 140-160, August.
- John Gibson & Steven Stillman, 2004. "CPI Bias and Real Living Standards in Russia During The Transition," Econometric Society 2004 North American Summer Meetings 504, Econometric Society.
- Yatchew,Adonis, 2003.
"Semiparametric Regression for the Applied Econometrician,"
Cambridge University Press, number 9780521812832, November.
- Yatchew,Adonis, 2003. "Semiparametric Regression for the Applied Econometrician," Cambridge Books, Cambridge University Press, number 9780521012263, November.
- Gong, Cathy Honge & Meng, Xin, 2008. "Regional Price Differences in Urban China 1986-2001: Estimation and Implication," IZA Discussion Papers 3621, Institute for the Study of Labor (IZA).
- Chul Chung & John Gibson & Bonggeun Kim, 2010. "CPI Mismeasurements and Their Impacts on Economic Management in Korea," Asian Economic Papers, MIT Press, vol. 9(1), pages 1-15, January.
- James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
- Pollak, Robert A & Wales, Terence J, 1981. "Demographic Variables in Demand Analysis," Econometrica, Econometric Society, vol. 49(6), pages 1533-51, November.
- repec:pri:rpdevs:deaton_tarozzi_prices_poverty is not listed on IDEAS
- Bruce W. Hamilton, 2001. "Using Engel's Law to Estimate CPI Bias," American Economic Review, American Economic Association, vol. 91(3), pages 619-630, June.
- repec:pri:rpdevs:deaton_price_trends_in_india_version_3_jan_08_all.pdf is not listed on IDEAS
- Erling Røed Larsen, 2007. "Does the CPI Mirror the Cost of Living? Engel's Law Suggests Not in Norway," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(1), pages 177-195, 03.
- Robert T. Jensen & Nolan H. Miller, 2010. "A Revealed Preference Approach to Measuring Hunger and Undernutrition," NBER Working Papers 16555, National Bureau of Economic Research, Inc.
- Behrman, Jere R. & Deolalikar, Anil B., 1988. "Health and nutrition," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 14, pages 631-711 Elsevier.
- Dipankor Coondoo & Amita Majumder & Somnath Chattopadhyay, 2011. "Estimating Spatial Consumer Price Indices Through Engel Curve Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(1), pages 138-155, 03.
- repec:pri:rpdevs:deaton_price_trends_in_india_and_their_implications_for_measuring_poverty is not listed on IDEAS
- Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, November.
- Nuxoll, Daniel A, 1994. "Differences in Relative Prices and International Differences in Growth Rates," American Economic Review, American Economic Association, vol. 84(5), pages 1423-36, December.
- Diewert, W Erwin, 1978. "Superlative Index Numbers and Consistency in Aggregation," Econometrica, Econometric Society, vol. 46(4), pages 883-900, July.
- repec:pri:rpdevs:deaton_price_trends_in_india_version_3_jan_08_all is not listed on IDEAS
- Somnath Chattopadhyay, 2010. "District level poverty estimation: a spatial approach," Economics Bulletin, AccessEcon, vol. 30(4), pages 2962-2977.
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_4122. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe)
If references are entirely missing, you can add them using this form.