A Theoretical and Empirical Investigation of the Application of an Endogenous Poverty Line and Its Relationship with the Poverty Impact of Policy Reforms
This research aims to theoretically and empirically investigate the difference of poverty outcome between applying a fixed and an endogenous poverty line. Applying the microeconomic theory of consumer behavior and the CGEMicrosimulation, this study has theoretically and empirically proven that, if a fixed poverty line is applied, the poverty impact of policy reforms (economic shocks) which significantly increase (decrease) price will always be underestimated (overestimated). This study empirically found that there is 0.316 percentage point difference in the poverty outcome between applying the endogenous poverty line and the fixed poverty line when analyzing the impact on poverty in Indonesia of 100 percent increase in the world soybean price. Supposing the fixed poverty line, the poverty rate will increase by 0.180 per cent, while supposing the endogenous poverty line, the poverty rate will increase by 0.496 per cent. Therefore, applying either an endogenous or a fixed poverty line will have a different policy implication.
|Date of creation:||Nov 2011|
|Date of revision:||Nov 2011|
|Contact details of provider:|| Phone: (021)-7272425|
Web page: http://www.feb.ui.ac.id
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Datt, Gaurav & Ravallion, Martin, 1998.
"Why Have Some Indian States Done Better Than Others at Reducing Rural Poverty?,"
London School of Economics and Political Science, vol. 65(257), pages 17-38, February.
- Datt, Gaurav & Ravallion, Martin, 1996. "Why have some Indian states done better than others at reducing rural poverty?," Policy Research Working Paper Series 1594, The World Bank.
- Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680, December.
- Elizabeth T. Powers, 1995. "Inflation, unemployment, and poverty revisited," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 2-13.
- Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931, December.
- B. Decaluwé & L. Savard & E. Thorbecke, 2005. "General Equilibrium Approach for Poverty Analysis: With an Application to Cameroon," African Development Review, African Development Bank, vol. 17(2), pages 213-243.
- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
- Aldi Hagenaars & Klaas de Vos, 1988. "The Definition and Measurement of Poverty," Journal of Human Resources, University of Wisconsin Press, vol. 23(2), pages 211-221.
- Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
- Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
When requesting a correction, please mention this item's handle: RePEc:lpe:wpecbs:201101. 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: (Muhammad Halley Yudhistira)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.