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Measuring poverty using qualitative perceptions of welfare

  • Pradhan, Menno
  • Ravallion, Martin

The authors show how subjective poverty lines can be derived using simple qualitative assessments of perceived consumption adequacy, based on a household survey. Respondents were asked whether their consumption of food, housing, and clothing was adequate for their family's needs. The author's approach, by identifying the subjective poverty line without the usual"minimum-income question,"offers wide applications in developing country settings. They implement it using survey data for Jamaica and Nepal. The implied subjective poverty lines are robust to alternative methods of dealing with other components of consumption, for which the subjective"adequacy"question was not asked. The aggregate poverty rates based on subjective poverty lines come close to those based on independent"objective"poverty lines. There are notable differences, however, when geographic and demographic poverty profiles are constructed.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2011.

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Date of creation: 30 Nov 1998
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Handle: RePEc:wbk:wbrwps:2011
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  1. Pollak, R.A., 1990. "Welfare Comparisons And Situations Comparisons," Discussion Papers in Economics at the University of Washington 90-11, Department of Economics at the University of Washington.
  2. de Vos, Klaas & Garner, Thesia I, 1991. "An Evaluation of Subjective Poverty Definitions: Comparing Results from the U.S. and the Netherlands," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(3), pages 267-85, September.
  3. Lipton, Michael & Ravallion, Martin, 1993. "Poverty and policy," Policy Research Working Paper Series 1130, The World Bank.
  4. Kapteyn, A.J., 1994. "The measurement of household cost functions : Revealed preference versus subjective measures," Discussion Paper 1994-3, Tilburg University, Center for Economic Research.
  5. Ravallion, Martin & Bidani, Benu, 1993. "How robust is a poverty profile?," Policy Research Working Paper Series 1223, The World Bank.
  6. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  7. Diane Colasanto & Arie Kapteyn & Jacques van der Gaag, 1984. "Two Subjective Definitions of Poverty: Results from the Wisconsin Basic Needs Study," Journal of Human Resources, University of Wisconsin Press, vol. 19(1), pages 127-138.
  8. Arie Kapteyn & Sara van de Geer & Huib van de Stadt, 1985. "The Impact of Changes in Income and Family Composition on Subjective Measures of Well-Being," NBER Chapters, in: Horizontal Equity, Uncertainty, and Economic Well-Being, pages 35-68 National Bureau of Economic Research, Inc.
  9. Kapteyn, Arie, 1994. "The Measurement of Household Cost Functions: Revealed Preference versus Subjective Measures," Journal of Population Economics, Springer, vol. 7(4), pages 333-50, November.
  10. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
  11. Kapteyn, A.J. & Kooreman, P. & Willemse, R., 1987. "Some methodological issues in the implementation of subjective poverty definitions," Research Memorandum FEW 245, Tilburg University, School of Economics and Management.
  12. Lanjouw, Peter & Ravallion, Martin & DEC, 1994. "Poverty and household size," Policy Research Working Paper Series 1332, The World Bank.
  13. Theo Goedhart & Victor Halberstadt & Arie Kapteyn & Bernard van Praag, 1977. "The Poverty Line: Concept and Measurement," Journal of Human Resources, University of Wisconsin Press, vol. 12(4), pages 503-520.
  14. Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, vol. 69(2), pages 216-21, May.
  15. Stanovnik, Tine, 1992. "Perception of poverty and income satisfaction : An empirical analysis of Slovene households," Journal of Economic Psychology, Elsevier, vol. 13(1), pages 57-69, March.
  16. Kakwani, Nanak, 1993. "Statistical Inference in the Measurement of Poverty," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 632-39, November.
  17. Grosh, M.E. & Glewwe, P., 1995. "A Guide to Living Standards Measurement Study Surveys and their Data Sets," Papers 120, World Bank - Living Standards Measurement.
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