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A Model-Based Assessment of India's Progress in Reducing Poverty in the 1990s

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Abstract

An econometric model of poverty incidence is calibrated to 20 household surveys for India's 15 major states spanning 1960-1994. The model builds on past research suggesting that the key determinants of the rate of poverty reduction at state level are agricultural yields, growth of the non-farm sector (depending on the state's initial conditions), development spending, and inflation. The model is used to predict the rates of poverty reduction over the period 1994-2000. The overall incidence of poverty is projected to have fallen from 39 per cent to 34 per cent over this period, suggesting that the rate of poverty reduction in the 1990s is slightly lower than the 1980s and lower than one would have expected given the growth in the 1990s. We offer some explanations as to why the growth process in the 1990s has not done more to reduce poverty in India.

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  • Gaurav Datt & Valerie Kozel & Martin Ravallion, 2003. "A Model-Based Assessment of India's Progress in Reducing Poverty in the 1990s," Monash Economics Working Papers archive-32, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:archive-32
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    File URL: http://www.jstor.org/stable/4413134
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    Cited by:

    1. K.L. Datta, 2006. "The Debate on the Poverty Estimates of 1999–2000," Development Economics Working Papers 22150, East Asian Bureau of Economic Research.
    2. Yoko Kijima & Lanjouw, Peter, 2003. "Poverty in India during the1990s - a regional perspective," Policy Research Working Paper Series 3141, The World Bank.
    3. Peter Lanjouw & Rinku Murgai, 2009. "Poverty decline, agricultural wages, and nonfarm employment in rural India: 1983-2004," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 243-263, March.
    4. Alessandro Tarozzi & Aprajit Mahajan, 2005. "Child Nutrition in India in the Nineties: A Story of Increased Gender Inequality?," Discussion Papers 04-029, Stanford Institute for Economic Policy Research.
    5. Raghbendra Jha & Raghav Gaiha, 2004. "Undernutrition, Poverty and Growth in Rural India - A Regional Analysis," ASARC Working Papers 2004-02, The Australian National University, Australia South Asia Research Centre.
    6. Angus Deaton & Valerie Kozel, 2005. "Data and Dogma: The Great Indian Poverty Debate," World Bank Research Observer, World Bank Group, vol. 20(2), pages 177-199.

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