Part I of this chapter briefly reviews the arguments for using consumption rather than income as a measure of living standards and for using it to measure poverty and inequality. It goes on to discuss the principal uses to which consumption data have been put; while the docu-mentation of living standards remains the central aim of LSMS surveys, there are a number of other important policy issues that can be illuminated using consumption data. Thereafter, Part I reviews some of the experience of more than 10 years of LSMS surveys in collecting consumption data. Part II discusses the data that are needed to construct a consumption-based measure of living standards and reviews the design issues that affect the cost of collecting data as well as its eventual accuracy. Part III presents a draft consumption module, while Part IV provides explanatory notes on that draft module.
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