Benchmarking the Effective Literacy Rate
By now the importance of literacy in the process of development is widely accepted. However, unlike measuring welfare or inequality, the problem of literacy measurement remains largely unexamined. Alternatives to the standard literacy rate, R, equal to the number of literate adults as a percentage of the adult population, are not well known, but this measure has its deficiencies. In particular, several authors have identified the externality accruing to proximate illiterates, that is, illiterate people with access to a literate person. The standard literacy rate ignores this externality; measures of effective literacy are sensitive to it. The present note offers two effective literacy rates (measures) and a set of axioms characterizing each. Nearly all measures of effective literacy appearing in the literature are greater than or equal to R. In fact, the best known of these, the Basu-Foster measure L*, is strictly greater in virtually every case (see Basu and Foster ). Although the inequality L* >= R is an unintended consequence of their construction, it amounts to setting a benchmark for the effective literacy rate. This notes examines Basu and Foster's framework and offers an alternative benchmark.
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- Basu, Kaushik & Narayan, Ambar & Ravallion, Martin, 2001. "Is literacy shared within households? Theory and evidence for Bangladesh," Labour Economics, Elsevier, vol. 8(6), pages 649-665, December.
- Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198292975.
- Mitra, Tapan, 2002. "On Literacy Rankings," Working Papers 02-16, Cornell University, Center for Analytic Economics.
- Gibson, John, 2001. "Literacy and Intrahousehold Externalities," World Development, Elsevier, vol. 29(1), pages 155-166, January.
- Subramanian, S., 2004. "Measuring literacy: some extensions of the Basu-Foster framework," Journal of Development Economics, Elsevier, vol. 73(1), pages 453-463, February.
- Maddox, Bryan, 2007. "Worlds Apart? Ethnographic Reflections on "Effective Literacy" and Intrahousehold Externalities," World Development, Elsevier, vol. 35(3), pages 532-541, March.
- Basu, Kaushik & Foster, James E, 1998.
"On Measuring Literacy,"
Royal Economic Society, vol. 108(451), pages 1733-49, November.
- Dutta, Indranil, 2004. "Generalized measures of literacy," Mathematical Social Sciences, Elsevier, vol. 48(1), pages 69-80, July.
- Basu, Kaushik & Narayan, Ambar & Ravallion, Martin, 1999. "Is knowledge shared within households?," Policy Research Working Paper Series 2261, The World Bank.
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