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Estimating utility-consistent poverty lines

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  • Arndt, Channing
  • Simler, Kenneth R.

Abstract

"The “Cost of Basic Needs” (CBN) approach to drawing consumption-based poverty lines is widely applied and lays credible claim to being the best practice for estimating poverty measures. Unfortunately, a growing mass of evidence indicates that poverty estimates obtained under the CBN approach are often demonstrably utility inconsistent. Here, we introduce an information theoretic approach for estimating utility-consistent poverty lines. An example of the approach is provided for the case of Mozambique. The approach represents a powerful addition to the poverty analyst's tool kit and enhances the attractiveness of the CBN approach for practical poverty measurement problems." Authors' Abstract

Suggested Citation

  • Arndt, Channing & Simler, Kenneth R., 2005. "Estimating utility-consistent poverty lines," FCND discussion papers 189, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:fcnddp:189
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    References listed on IDEAS

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    1. Golan, Amos, 2002. "Information and Entropy Econometrics--Editor's View," Journal of Econometrics, Elsevier, vol. 107(1-2), pages 1-15, March.
    2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    3. Haddad, Lawrence James & Adato, Michelle, 2001. "How effectively do public works programs transfer benefits to the poor?," FCND discussion papers 108, International Food Policy Research Institute (IFPRI).
    4. Tarp, Finn, et al, 2002. "The Robustness of Poverty Profiles Reconsidered," Economic Development and Cultural Change, University of Chicago Press, vol. 51(1), pages 77-108, October.
    5. Fafchamps, Marcel & Quisumbing, Agnes R., 1999. "Social roles, human capital, and the intrahousehold division of labor," FCND discussion papers 73, International Food Policy Research Institute (IFPRI).
    6. Ravallion, Martin & Lokshin, Michael, 2003. "On the utility consistency of poverty lines," Policy Research Working Paper Series 3157, The World Bank.
    7. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
    8. Gibson, John & Rozelle, Scott, 2003. "Poverty and Access to Roads in Papua New Guinea," Economic Development and Cultural Change, University of Chicago Press, vol. 52(1), pages 159-185, October.
    9. Zellner, A., 1988. "Optimal Information-Processing And Bayes' Theorem," Papers m8803, Southern California - Department of Economics.
    10. Datt, Gaurav & Jolliffe, Dean & Sharma, Manohar, 1998. "A profile of poverty in Egypt: 1997," FCND discussion papers 49, International Food Policy Research Institute (IFPRI).
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    Cited by:

    1. Kenneth R. Simler & Channing Arndt, 2007. "Poverty Comparisons With Absolute Poverty Lines Estimated From Survey Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(2), pages 275-294, June.
    2. Simler, Kenneth R. & Arndt, Channing, 2006. "Poverty Comparisons with Endogenous Absolute Poverty Lines," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25775, International Association of Agricultural Economists.
    3. Fox, Louise & Sohnesen, Thomas Pave, 2013. "Household enterprises in Mozambique : key to poverty reduction but not on the development agenda ?," Policy Research Working Paper Series 6570, The World Bank.
    4. Arndt, Channing & Thurlow, James, 2009. "Inequality and Poverty Impacts of Trade Distortions in Mozambique," Agricultural Distortions Working Paper 52794, World Bank.
    5. Channing Arndt & Kenneth R. Simler, 2007. "Consistent poverty comparisons and inference," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 133-139, September.

    More about this item

    Keywords

    Poverty lines ; Poverty alleviation ; Development projects Evaluation ; measurement ; Entropy estimation ;

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