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Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)

  • Angus Deaton

The extent to which growth reduces global poverty has been disputed for 30 years. Although there is better data than ever before, controversies are not resolved. A major problem is that consumption measured from household surveys, which is used to measure poverty, grows less rapidly than consumption measured in national accounts, in the world as a whole, and in large countries, particularly India, China, and the US. In consequence, measured poverty has fallen less rapidly than appears warranted by measured growth in poor countries. One plausible cause is that richer households are less likely to participate in surveys. But growth in the national accounts is also upwardly biased, and consumption in the national accounts contains large and rapidly growing items that are not consumed by the poor and not included in surveys. So it is possible for consumption of the poor to grow less rapidly than national consumption, without any increase in measured inequality. Current statistical procedures in poor countries understate the rate of global poverty reduction, and overstate growth in the world.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9822.

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Date of creation: Jul 2003
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Publication status: published as Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, 04.
Handle: RePEc:nbr:nberwo:9822
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  1. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
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  7. Ravallion, Martin, 2001. "Measuring aggregate welfare in developing countries - How well do national accounts and surveys agree?," Policy Research Working Paper Series 2665, The World Bank.
  8. Keidel, Albert, 2001. "China's GDP expenditure accounts," China Economic Review, Elsevier, vol. 12(4), pages 355-367.
  9. Ahluwalia, Montek S, et al, 1980. "Who Benefits from Economic Development? Comment," American Economic Review, American Economic Association, vol. 70(1), pages 242-45, March.
  10. Wu, Harry X, 2000. "China's GDP Level and Growth Performance: Alternative Estimates and the Implications," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(4), pages 475-99, December.
  11. Taylor, Lance & Bacha, Edmar L, 1976. "The Unequalizing Spiral: A First Growth Model for Belindia," The Quarterly Journal of Economics, MIT Press, vol. 90(2), pages 197-218, May.
  12. Angus Deaton and Jean Drèze & Jean Drèze, 2002. "Poverty and Inequality in India: A Reexamination," Working papers 107, Centre for Development Economics, Delhi School of Economics.
  13. Cline, William R., 1975. "Distribution and development : A survey of literature," Journal of Development Economics, Elsevier, vol. 1(4), pages 359-400, November.
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