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Measuring the Pro-Poorness of Income Growth Within an Elasticity Framework

Author

Listed:
  • B. Essama-Nssah

    (World Bank Poverty Reduction Group)

  • Peter J. Lambert

    () (University of Oregon Economics Department)

Abstract

Poverty reduction has become a fundamental objective of development, and therefore a metric for assessing the effectiveness of various interventions. Economic growth can be a powerful instrument of income poverty reduction. This creates a need for meaningful ways of assessing the poverty impact of growth. This paper follows the elasticity approach to propose a measure of pro-poorness defined as a weighted average of the deviation of a growth pattern from the benchmark case. The measure can help assess pro-poorness both in terms of aggregate poverty measures which are members of the additively separable class, and at percentiles. It also lends itself to a decomposition procedure, whereby the overall pattern of income growth can be unbundled, and the contributions of income components to overall pro-poorness identified. An application to data for Indonesia in the 1990s reveals that the amount of poverty reduction achieved over that period remains far below what would have been achieved under distributional neutrality. This conclusion is robust to the choice of a poverty measure among members of the additively separable class, and can be tracked back to changes in expenditure components.

Suggested Citation

  • B. Essama-Nssah & Peter J. Lambert, 2006. "Measuring the Pro-Poorness of Income Growth Within an Elasticity Framework," University of Oregon Economics Department Working Papers 2006-12, University of Oregon Economics Department.
  • Handle: RePEc:ore:uoecwp:2006-12
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    File URL: http://economics.uoregon.edu/papers/UO-2006-12_Lambert_ProPoor.pdf
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    More about this item

    Keywords

    poverty; growth; pro-poorness; social evaluation JEL classifications :;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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