On measuring literacy

The authors present a new approach to evaluating the level of effective literacy in a region or country, one that takes into account the presence in a household of a literate person. They characterize the approach and give an empirical illustration of its use. They designed the new measures of literacy because traditional measures of the literacy rate (R) ignore how the presence of literate person in the household affects literacy. They contend that literate household members generate a positive externality -- a kind of public good - for illiterate members. They believe their new measures will be superior to R in predicting or explaining other achievements that depend on literacy. They expect the rate of diffusion of a new technology for farming, for example, to be more closely linked to the effective literacy rate than to the usual literacy rate. If an agricultural extension worker leaves behind a brochure explaining how to plant and care for high-yielding varieties, an illiterate person who lives in a household with at least one literate member has access to that public good; an isolated illiterate - whose household has not literate members - may not have. Similarly, if the presence ( or absence) of one literate household member increases the chance of a child becoming literate, so the effective literacy rate should be a better predictor of future generations'literacy rate should be a better predictor of future generations'literacy levels. Some changes in policy emphasis might be expected if the new effective literacy measures are used. There might be a shift, for example, toward ensuring a better distribution of literacy across households or toward addressing more seriously the problem of female illiteracy. More work is needed to determine if a child in a household with a higher percentage of literate adults has more frequent access to literacy skills.