IDEAS home Printed from https://ideas.repec.org/p/fpr/fcnddp/211.html
   My bibliography  Save this paper

Poverty comparisons with absolute poverty lines estimated from survey data

Author

Listed:
  • Simler. Kenneth R.
  • Arndt, Channing

Abstract

"The objective of measuring poverty is usually to make comparisons over time or between two or more groups. Common statistical inference methods are used to determine whether an apparent difference in measured poverty is statistically significant. Studies of relative poverty have long recognized that when the poverty line is calculated from sample survey data, both the variance of the poverty line and the variance of the welfare metric contribute to the variance of the poverty estimate. In contrast, studies using absolute poverty lines have ignored the poverty line variance, even when the poverty lines are estimated from sample survey data. Including the poverty line variance could either reduce or increase the precision of poverty estimates, depending on the specific characteristics of the data. This paper presents a general procedure for estimating the standard error of poverty measures when the poverty line is estimated from survey data. Based on bootstrap methods, the approach can be used for a wide range of poverty measures and methods for estimating poverty lines. The method is applied to recent household survey data from Mozambique. When the sampling variance of the poverty line is taken into account, the estimated standard errors of Foster-Greer- Thorbecke and Watts poverty measures increase by 15 to 30 percent at the national level, with considerable variability at lower levels of aggregation." -- Authors' Abstract

Suggested Citation

  • Simler. Kenneth R. & Arndt, Channing, 2006. "Poverty comparisons with absolute poverty lines estimated from survey data," FCND discussion papers 211, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:fcnddp:211
    as

    Download full text from publisher

    File URL: http://www.ifpri.org/sites/default/files/publications/fcndp211.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Datt, Gaurav & Jolliffe, Dean, 2005. "Poverty in Egypt: Modeling and Policy Simulations," Economic Development and Cultural Change, University of Chicago Press, vol. 53(2), pages 327-346, January.
    2. Kappel, Robert & Lay, Jann & Steiner, Susan, 2005. "Uganda: No more pro-poor growth?," Proceedings of the German Development Economics Conference, Kiel 2005 31, Verein für Socialpolitik, Research Committee Development Economics.
    3. Mukherjee, Sanjukta & Benson, Todd, 2003. "The Determinants of Poverty in Malawi, 1998," World Development, Elsevier, vol. 31(2), pages 339-358, February.
    4. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-764, July.
    5. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    6. Todd Benson & Charles Machinjili & Lawrence Kachikopa, 2004. "Poverty in Malawi, 1998," Development Southern Africa, Taylor & Francis Journals, vol. 21(3), pages 419-441.
    7. Arndt, Channing & Simler, Kenneth R., 2005. "Estimating utility-consistent poverty lines," FCND briefs 189, International Food Policy Research Institute (IFPRI).
    8. 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).
    9. Ravallion, Martin, 1994. "Poverty rankings using noisy data on living standards," Economics Letters, Elsevier, vol. 45(4), pages 481-485, August.
    10. Bishop, John A & Chow, K Victor & Zheng, Buhong, 1995. "Statistical Inference and Decomposable Poverty Measures," Bulletin of Economic Research, Wiley Blackwell, vol. 47(4), pages 329-340, October.
    11. Ravallion, Martin & Bidani, Benu, 1994. "How Robust Is a Poverty Profile?," The World Bank Economic Review, World Bank Group, vol. 8(1), pages 75-102, January.
    12. Ian Preston, 1995. "Sampling Distributions of Relative Poverty Statistics," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 44(1), pages 91-99, March.
    13. Zheng, Buhong, 2001. "Statistical inference for poverty measures with relative poverty lines," Journal of Econometrics, Elsevier, vol. 101(2), pages 337-356, April.
    14. Deaton, A. & Zaidi, S., 1999. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," Papers 192, Princeton, Woodrow Wilson School - Development Studies.
    15. Kakwani, Nanak, 1993. "Statistical Inference in the Measurement of Poverty," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 632-639, November.
    16. Russell Davidson & Jean-Yves Duclos, 2000. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," Econometrica, Econometric Society, vol. 68(6), pages 1435-1464, November.
    17. repec:zbw:ifwkie:3715 is not listed on IDEAS
    18. Blackorby, Charles & Donaldson, David, 1987. "Welfare ratios and distributionally sensitive cost-benefit analysis," Journal of Public Economics, Elsevier, vol. 34(3), pages 265-290, December.
    19. Angus Deaton & Salman Zaidi, 2002. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," World Bank Publications, The World Bank, number 14101, April.
    20. Margaret Grosh & Paul Glewwe, 2000. "Designing Household Survey Questionnaires for Developing Countries," World Bank Publications - Books, The World Bank Group, number 25338, November.
    21. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
    22. Greer, Joel & Thorbecke, Erik, 1986. "A methodology for measuring food poverty applied to Kenya," Journal of Development Economics, Elsevier, vol. 24(1), pages 59-74, November.
    23. Tarp, Finn & Simler, Kenneth & Matusse, Cristina & Heltberg, Rasmus & Dava, Gabriel, 2002. "The Robustness of Poverty Profiles Reconsidered," Economic Development and Cultural Change, University of Chicago Press, vol. 51(1), pages 77-108, October.
    24. Stephen Howes & Jean Olson Lanjouw, 1998. "Does Sample Design Matter For Poverty Rate Comparisons?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(1), pages 99-109, March.
    25. 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).
    26. Ravallion, Martin & Lokshin, Michael, 2003. "On the utility consistency of poverty lines," Policy Research Working Paper Series 3157, The World Bank.
    27. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. World Bank, 2010. "Paraguay Poverty Assessment : Determinants and Challenges for Poverty Reduction [Paraguay - Estudio de pobreza : determinantes y desafíos para la reduccion de la pobreza]," World Bank Publications - Reports 12585, The World Bank Group.
    2. Karl Pauw & Ulrik Beck & Richard Mussa, 2014. "Did Rapid Smallholder-Led Agricultural Growth Fail to Reduce Rural Poverty?: Making Sense of Malawi's Poverty Puzzle," WIDER Working Paper Series wp-2014-123, World Institute for Development Economic Research (UNU-WIDER).
    3. Marcelo Arbex & Enlinson Mattos, 2010. "Poverty and the Optimal General Income Tax-cum-Audit Policy," Working Papers 02-2010, Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto.
    4. Saeed Solaymani & Fatimah Kari & Roza Hazly Zakaria, 2014. "Evaluating the Role of Subsidy Reform in Addressing Poverty Levels in Malaysia: A CGE Poverty Framework," Journal of Development Studies, Taylor & Francis Journals, vol. 50(4), pages 556-569, April.
    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.
    6. Pauw, Karl & Beck, Ulrik & Mussa, Richard, 2014. "Did rapid smallholder-led agricultural growth fail to reduce rural poverty? Making sense of Malawi's poverty puzzle," WIDER Working Paper Series 123, World Institute for Development Economic Research (UNU-WIDER).
    7. Arbex Marcelo & Mattos Enlinson & Trudeau Christian, 2012. "Poverty, Informality and the Optimal General Income Tax Policy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-22, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. 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.
    3. James Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 491-524, December.
    4. James E. Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster-Greer-Thorbecke (FGT) Poverty Measures: Twenty-Five Years Later," Working Papers 2010-14, The George Washington University, Institute for International Economic Policy.
    5. Russell Davidson & Jean-Yves Duclos, 2000. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," Econometrica, Econometric Society, vol. 68(6), pages 1435-1464, November.
    6. Dean Jolliffe, 2003. "On the Relative Well‐Being of the Nonmetropolitan Poor: An Examination of Alternate Definitions of Poverty during the 1990s," Southern Economic Journal, John Wiley & Sons, vol. 70(2), pages 295-311, October.
    7. Buhong Zheng, 2004. "Poverty comparisons with dependent samples," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(3), pages 419-428.
    8. Arndt, Channing & Simler, Kenneth R., 2005. "Estimating utility-consistent poverty lines," FCND briefs 189, International Food Policy Research Institute (IFPRI).
    9. Tim Goedemé, 2013. "How much Confidence can we have in EU-SILC? Complex Sample Designs and the Standard Error of the Europe 2020 Poverty Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(1), pages 89-110, January.
    10. Tahsin Mehdi, 2020. "Testing for Stochastic Dominance up to a Common Relative Poverty Line," Econometrics, MDPI, vol. 8(1), pages 1-9, February.
    11. Emily Schmidt & Rachel Gilbert & Brian Holtemeyer & Kristi Mahrt, 2021. "Poverty analysis in the lowlands of Papua New Guinea underscores climate vulnerability and need for income flexibility," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(1), pages 171-191, January.
    12. Wen-Hao Chen & Jean-Yves Duclos, 2011. "Testing for poverty dominance: an application to Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 44(3), pages 781-803, August.
    13. Christophe Muller, 2008. "The Measurement Of Poverty With Geographical And Intertemporal Price Dispersion: Evidence From Rwanda," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(1), pages 27-49, March.
    14. LABAR, Kelly & BRESSON, Florent, 2011. "A multidimensional analysis of poverty in China from 1991 to 2006," China Economic Review, Elsevier, vol. 22(4), pages 646-668.
    15. Zheng, Buhong, 2001. "Statistical inference for poverty measures with relative poverty lines," Journal of Econometrics, Elsevier, vol. 101(2), pages 337-356, April.
    16. World Bank, 2008. "Mozambique - Beating the Odds : Sustaining Inclusion in a Growing Economy - A Mozambique Poverty, Gender, and Social Assessment, Volume 1. Main Report," World Bank Publications - Reports 7981, The World Bank Group.
    17. Lars Osberg & Kuan Xu, 1999. "Poverty Intensity: How Well Do Canadian Provinces Compare?," Canadian Public Policy, University of Toronto Press, vol. 25(2), pages 179-195, June.
    18. Jolliffe, Dean, 2006. "The Cost of Living and the Geographic Distribution of Poverty," Economic Research Report 7254, United States Department of Agriculture, Economic Research Service.
    19. Celso Nunes, 2008. "Poverty Measurement: The Development of Different Approaches and Its Techniques," Working Papers 93, ECINEQ, Society for the Study of Economic Inequality.
    20. Channing Arndt & Kristi Mahrt & Finn Tarp, 2016. "Absolute poverty lines," WIDER Working Paper Series 008, World Institute for Development Economic Research (UNU-WIDER).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fpr:fcnddp:211. 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: . General contact details of provider: https://edirc.repec.org/data/ifprius.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/ifprius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.