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A Decomposition of Poverty Tre across Regions: The Role of Variation in the Income and Inequality Elasticities of Poverty

  • Adriaan Kalwij


  • Arjan Verschoor

The impact of globalization on global and local inequality is hotly debated in the recent literature. This study considers the separate issue of the impact of globalization on poverty through quantifying explicitly the responsiveness of poverty to aggregate changes in income distribution. We illustrate the quantitative importance of such an approach through decomposing poverty trends observed in the six major developing regions over the period 1980-98 under the assumption of a log-normal income distribution. We find that differential income growth accounts for most of the diversity in poverty trends, both across regions and over time, but leaves a substantial amount of variation unexplained. The impact of changes in inequality is relatively small, except in Eastern Europe and Central Asia. Income and inequality elasticities of poverty change.[Research Paper No. 2005/36]

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Paper provided by eSocialSciences in its series Working Papers with number id:2611.

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Date of creation: Jun 2010
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Handle: RePEc:ess:wpaper:id:2611
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  1. Lee, Ha Yan & Ricci, Luca Antonio & Rigobon, Roberto, 2004. "Once again, is openness good for growth?," Journal of Development Economics, Elsevier, vol. 75(2), pages 451-472, December.
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  4. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
  5. John Gibson, 2000. "The impact of growth and distribution on poverty in Papua New Guinea," Applied Economics Letters, Taylor & Francis Journals, vol. 7(8), pages 541-544.
  6. Ravallion, Martin & Huppi, Monika, 1991. "Measuring Changes in Poverty: A Methodological Case Study of Indonesia during an Adjustment Period," World Bank Economic Review, World Bank Group, vol. 5(1), pages 57-82, January.
  7. Timothy Besley & Robin Burgess, 2003. "Halving Global Poverty," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 3-22, Summer.
  8. Ravallion, Martin & Shaohua Chen, 1996. "What can new survey data tell us about recent changes in distribution and poverty?," Policy Research Working Paper Series 1694, The World Bank.
  9. Bigsten, Arne & Kebede, Bereket & Shimeles, Abebe & Taddesse , Mekonnen, 2002. "Growth and Poverty Reduction in Ethiopia: Evidence from Household Panel Surveys," Working Papers in Economics 65, University of Gothenburg, Department of Economics.
  10. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank.
  11. Anne Epaulard, 2003. "Macroeconomic Performance and Poverty Reduction," IMF Working Papers 03/72, International Monetary Fund.
  12. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September.
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