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Poverty Analysis Within a General Equilibrium Framework

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  • Decaluwe, B.
  • Patry, A.
  • Savard, L.
  • Thorbecke, E.

Abstract

The main objective of this paper is to show how Social Accounting Matrices (SAM) and Computable General Equilibrium (CGE) Models can be used to highlight and address issues related to income distribution and poverty. The paper is divided into two major parts. Part 1 presents the concept of the SAM as a comprehensive, consistent and disaggregated data system and shows how the SAM methodology can be used to analyze issues related to income distribution and, in a much more limited way, poverty. Part 2 is devoted to the presentation of a CGE model calibrated on an archetype African SAM (same as above). One innovation in the specification of the present CGE is that it goes part way in endogenizing the poverty line and the resulting poverty incidence among the different socioeconomic household groups and representing income distribution with a flexible Beta distribution function and using the F-G-T additively decomposable class of poverty measures. The model is used to simulate the impact of two exogenous shocks (a fall in the price of the export crop and an import tariff reform) specifically on poverty.

Suggested Citation

  • Decaluwe, B. & Patry, A. & Savard, L. & Thorbecke, E., 1999. "Poverty Analysis Within a General Equilibrium Framework," Cahiers de recherche 9909, Université Laval - Département d'économique.
  • Handle: RePEc:lvl:laeccr:9909
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    References listed on IDEAS

    as
    1. Fortin, Bernard & Marceau, Nicolas & Savard, Luc, 1997. "Taxation, wage controls and the informal sector," Journal of Public Economics, Elsevier, vol. 66(2), pages 293-312, November.
    2. Ravallion, Martin & Chen, Shaohua, 1997. "What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?," World Bank Economic Review, World Bank Group, vol. 11(2), pages 357-382, May.
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    4. Chia, Ngee-Choon & Wahba, Sadek & Whalley, John, 1994. "Poverty-Reducing Targeting Programmes: A General Equilibrium Approach," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 3(2), pages 309-338, October.
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    10. Thorbecke, Erik, 1991. "Adjustment, growth and income distribution in Indonesia," World Development, Elsevier, vol. 19(11), pages 1595-1614, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Poverty; Computable General Equilibrium Model; Input Output Models;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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