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On the utility consistency of poverty lines

Author

Listed:
  • Ravallion, Martin
  • Lokshin, Michael

Abstract

Although poverty lines are widely used as deflators for inter-group welfare comparisons, their internal consistency is rarely given close scrutiny. A priori considerations suggest that commonly used methods cannot be relied on to yield poverty lines that are consistent in terms of utility, or for capabilities more generally. The theory of revealed preference offers testable implications of utility consistency for"poverty baskets"under homogeneous preferences. A case study of Russia's official poverty lines reveals numerous violations of revealed preference criteria-violations that are not solely attributable to heterogeneity in preferences associated with climatic differences.

Suggested Citation

  • Ravallion, Martin & Lokshin, Michael, 2003. "On the utility consistency of poverty lines," Policy Research Working Paper Series 3157, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3157
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    References listed on IDEAS

    as
    1. Menno Pradhan & Martin Ravallion, 2000. "Measuring Poverty Using Qualitative Perceptions Of Consumption Adequacy," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 462-471, August.
    2. 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.
    3. Paul, Satya, 1989. "A model of constructing the poverty line," Journal of Development Economics, Elsevier, vol. 30(1), pages 129-144, January.
    4. Arie Kapteyn & Peter Kooreman & Rob Willemse, 1988. "Some Methodological Issues in the Implementation of Subjective Poverty Definitions," Journal of Human Resources, University of Wisconsin Press, vol. 23(2), pages 222-242.
    5. Blackorby, Charles & Donaldson, David, 1987. "Welfare ratios and distributionally sensitive cost-benefit analysis," Journal of Public Economics, Elsevier, vol. 34(3), pages 265-290, December.
    6. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762.
    7. Greer, Joel & Thorbecke, Erik, 1986. "A methodology for measuring food poverty applied to Kenya," Journal of Development Economics, Elsevier, vol. 24(1), pages 59-74, November.
    8. Sen, Amartya, 1979. "The Welfare Basis of Real Income Comparisons: A Survey," Journal of Economic Literature, American Economic Association, vol. 17(1), pages 1-45, March.
    9. Ravallion, Martin & Sen, Binayak, 1996. "When Method Matters: Monitoring Poverty in Bangladesh," Economic Development and Cultural Change, University of Chicago Press, vol. 44(4), pages 761-792, July.
    10. Quentin Wodon, 1997. "Food energy intake and cost of basic needs: Measuring poverty in Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 34(2), pages 66-101.
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    Citations

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    Cited by:

    1. Lisa Grace S. Bernales, 2009. "Issues on the Official Poverty Estimation Methodology in the Philippines : Comparability of Estimates across Space and over Time," Development Economics Working Papers 23092, East Asian Bureau of Economic Research.
    2. Alfani, Federica & Azzarri, Carlo & d'Errico, Marco & Molini, Vasco, 2012. "Poverty in Mozambique : new evidence from recent household surveys," Policy Research Working Paper Series 6217, The World Bank.
    3. Radwan Shaban & Hiromi Asoaka & Bob Barnes & Vladimir Drebentsov & John Langenbrunner & Sajaia Zurab & James Stevens & David Tarr & Emil Tesliuc & Olga Shabalina & Ruslan Yemtsov, 2006. "Reducing Poverty through Growth and Social Policy Reform in Russia," World Bank Publications, The World Bank, number 6955, April.
    4. Indraneel Dasgupta & Ravi Kanbur, 2005. "Community and anti-poverty targeting," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 3(3), pages 281-302, December.
    5. Kenneth R. Simler & Channing Arndt, 2007. "Poverty Comparisons With Absolute Poverty Lines Estimated From Survey Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(2), pages 275-294, June.
    6. Albert, Jose Ramon G. & Molano, Wilma, 2009. "Estimation of the Food Poverty Line," Discussion Papers DP 2009-14, Philippine Institute for Development Studies.
    7. Sanjaya Acharya, 2004. "Measuring and Analyzing Poverty," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 1(2), pages 195-215, December.
    8. Jose Ramon Alber & Wilma Molano, 2016. "Estimation of the Food Poverty Line," Working Papers id:11226, eSocialSciences.
    9. Arndt, Channing & Simler, Kenneth R., 2005. "Estimating utility-consistent poverty lines," FCND discussion papers 189, International Food Policy Research Institute (IFPRI).
    10. World Bank, 2006. "Making the New Indonesia Work for the Poor," World Bank Other Operational Studies 8172, The World Bank.
    11. Bersales, Lisa Grace S., 2009. "Issues on the Official Poverty Estimation Methodology in the Philippines: Comparability of Estimates across Space and over Time," Discussion Papers DP 2009-17, Philippine Institute for Development Studies.
    12. World Bank, 2008. "Mozambique - Beating the Odds : Sustaining Inclusion in a Growing Economy - A Mozambique Poverty, Gender, and Social Assessment, Volume 1. Main Report," World Bank Other Operational Studies 7981, The World Bank.
    13. Jose Ramon Albert & Wilma Molano, 2009. "Estimation of the Food Poverty Line," Development Economics Working Papers 22948, East Asian Bureau of Economic Research.
    14. ALi Abdel Gadir Ali, "undated". "Poverty in the Arab Region: A Selective Review," API-Working Paper Series 0402, Arab Planning Institute - Kuwait, Information Center.
    15. World Bank, 2005. "Russia : Reducing Poverty through Growth and Social Policy Reform," World Bank Other Operational Studies 8523, The World Bank.
    16. Marcelo Bérgolo & Martín Leites & Gonzalo Salas, 2006. "Privaciones nutricionales : su vínculo con la pobreza y el ingreso monetario," Documentos de Trabajo (working papers) 06-03, Instituto de Economía - IECON.
    17. Lisa Grace S. Bersales, 2009. "Issues on the Official Poverty Estimation Methodology in the Philippines : Comparability of Estimates across Space and Over Time," Development Economics Working Papers 22950, East Asian Bureau of Economic Research.
    18. Julia Johannsen & Manfred Zeller & Stephan Klasen, 2007. "The capability dilemma in operational poverty assessment," Ibero America Institute for Econ. Research (IAI) Discussion Papers 159, Ibero-America Institute for Economic Research.
    19. Kanbur, Ravi & Shaffer, Paul, 2007. "Epistemology, Normative Theory and Poverty Analysis: Implications for Q-Squared in Practice," World Development, Elsevier, vol. 35(2), pages 183-196, February.

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