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Poverty comparisons with non-compatible data: theory and illustrations

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  • Lanjouw, Jean Olson
  • Lanjouw, Peter

Abstract

Comparisons of poverty rates are only rarely based on identical underlying definitions of welfare. The authors examine the sensitivity of poverty rates calculated from alternative definitions of consumption. They consider what theory can say about the direction of bias in comparisons and show that under certain conditions robust comparisons are possible. Data from Ecuador, El Salvador, and Pakistan show that the magnitude of biases can be substantial. Their robustness result is used as a baseline to explore the tradeoffs involved in aggregating noisy expenditure components. Although nonfood expenditures are often thought to be especially poorly measured, the authors'data indicate that the more comprehensive is the measure of consumption spending, the better it is as a measure of welfare.

Suggested Citation

  • Lanjouw, Jean Olson & Lanjouw, Peter, 1997. "Poverty comparisons with non-compatible data: theory and illustrations," Policy Research Working Paper Series 1709, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1709
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    References listed on IDEAS

    as
    1. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-764, July.
    2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    3. Atkinson,Anthony Barnes & Micklewright,John, 1992. "Economic Transformation in Eastern Europe and the Distribution of Income," Cambridge Books, Cambridge University Press, number 9780521438827, January.
    4. Ravallion, Martin, 1994. "Poverty rankings using noisy data on living standards," Economics Letters, Elsevier, vol. 45(4), pages 481-485, August.
    5. Atkinson, Anthony B, 1991. "Comparing Poverty Rates Internationally: Lessons from Recent Studies in Developed Countries," World Bank Economic Review, World Bank Group, vol. 5(1), pages 3-21, January.
    6. Ravallion, Martin & Bidani, Benu, 1994. "How Robust Is a Poverty Profile?," World Bank Economic Review, World Bank Group, vol. 8(1), pages 75-102, January.
    7. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
    8. John Dreze & Peter Lanjouw & Nicholas Stern, 1992. "Economic Mobility and Agricultural Labour in Rural India: A Case Study," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 27, pages 25-54.
    9. Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-1182, December.
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    Citations

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    Cited by:

    1. Schady, Norbert & Rosero, José, 2008. "Are cash transfers made to women spent like other sources of income?," Economics Letters, Elsevier, vol. 101(3), pages 246-248, December.
    2. Hentschel, Jesko & Lanjouw, Jean Olson & Lanjouw, Peter & Poggi, Javier, 1998. "Combining census and survey data to study spatial dimensions of poverty," Policy Research Working Paper Series 1928, The World Bank.
    3. Jean-Pierre Lachaud, 1998. "La pauvreté en Mauritanie : une approche multidimensionnelle," Documents de travail 31, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
    4. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Medición y análisis de la pobreza
      [Poverty Measurement and Analysis]
      ," MPRA Paper 10491, University Library of Munich, Germany.
    5. Jesko Hentschel & Peter Lanjouw, 2000. "Household welfare measurement and the pricing of basic services," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(1), pages 13-27.
    6. Barja Daza, Gover & Monterrey Arce, Javier & Villarroel Böhrt, Sergio, 2006. "Bolivia: Impact of shocks and poverty policy on household welfare," Revista Latinoamericana de Desarrollo Economico, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana, issue 6, pages 63-123, Abril.
    7. World Bank, 2004. "Ecuador : Poverty Assessment," World Bank Other Operational Studies 14593, The World Bank.
    8. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Измерение И Анализ Бедности
      [Poverty Measurement and Analysis]
      ," MPRA Paper 10492, University Library of Munich, Germany.
    9. Lanjouw, Peter, 1998. "Ecuador's rural nonfarm sector as a route out of poverty," Policy Research Working Paper Series 1904, The World Bank.
    10. Francisco de Hollanda Guimarães Ferreira & Peter Lanjouw & Marcelo Neri, 2000. "A new poverty profile for Brazil using PPV, PNAD and census data," Textos para discussão 418, Department of Economics PUC-Rio (Brazil).
    11. Ferreira, Francisco H. G. & Lanjouw, Peter & Neri, Marcelo Côrtes, 2003. "A Robust Poverty Profile for Brazil Using Multiple Data Sources," Revista Brasileira de Economia - RBE, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 57(1), January.
    12. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Mesure et analyse de la pauvreté
      [Poverty Measurement and Analysis]
      ," MPRA Paper 10490, University Library of Munich, Germany.
    13. World Bank, 2007. "Arab Republic of Egypt : Poverty Assessment Update, Volume 1. Main Report," World Bank Other Operational Studies 7642, The World Bank.
    14. Lanjouw, Peter & Milanovic, Branko & Paternostro, Stefano, 1998. "Poverty and the economic transition : how do changes in economies of scale affect poverty rates for different households?," Policy Research Working Paper Series 2009, The World Bank.

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