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Robustness of subjective welfare analysis in a poor developing country - Madagascar 2001

  • Lokshin, Michael
  • Umapathi, Nithin
  • Paternostro, Stefano

The authors analyze the subjective perceptions of poverty in Madagascar in 2001 and their relationship to objective poverty indicators. They base their analysis on survey responses to a series of subjective perception questions. The authors extend the existing empirical methodology for estimating subjective poverty lines on the basis of categorical consumption adequacy questions. Based on this methodology they calculate the household-specific, subjective poverty lines and compare the poverty profiles derived from different subjective welfarequestions. The results show that the aggregate poverty measures derived from consumption adequacy questions accord quite well with the poverty measures based on objective poverty lines. The subjective welfare analysis can be used in poor developing countries for evaluating socioeconomic and distributional impacts of various policy interventions.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3191.

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Date of creation: 15 Jan 2004
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Handle: RePEc:wbk:wbrwps:3191
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  1. DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001. "Preferences over inflation and unemployment: Evidence from surveys of happiness," ZEI Working Papers B 03-2001, ZEI - Center for European Integration Studies, University of Bonn.
  2. 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.
  3. Oswald, A.J., 1997. "Happiness and Economic Performance," Papers 18, Centre for Economic Performance & Institute of Economics.
  4. 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.
  5. Ravallion, Martin & Lokshin, Michael, 2002. "Self-rated economic welfare in Russia," European Economic Review, Elsevier, vol. 46(8), pages 1453-1473, September.
  6. Ravallion, Martin & Bidani, Benu, 1993. "How robust is a poverty profile?," Policy Research Working Paper Series 1223, The World Bank.
  7. Ravallion, Martin & Lokshin, Michael, 2001. "Identifying Welfare Effects from Subjective Questions," Economica, London School of Economics and Political Science, vol. 68(271), pages 335-57, August.
  8. 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.
  9. Angus Deaton & Salman Zaidi, 1999. "Guidelines for Constructing Consumption Aggregates For Welfare Analysis," Working Papers 217, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  10. Lokshin, Michael & Ravallion, Martin, 2005. "Rich and powerful?: Subjective power and welfare in Russia," Journal of Economic Behavior & Organization, Elsevier, vol. 56(2), pages 141-172, February.
  11. Bernard M. S. van Praag & P. Frijters & Ada Ferrer-i-Carbonell, 2001. "The Anatomy of Subjective Well-Being," Discussion Papers of DIW Berlin 265, DIW Berlin, German Institute for Economic Research.
  12. Bernard M.S. van Praag & Paul Frijters, 1999. "The measurement of welfare and well-being; the Leyden approach," School of Economics and Finance Discussion Papers and Working Papers Series 071a, School of Economics and Finance, Queensland University of Technology.
  13. 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.
  14. Ravallion, M., 1998. "Poverty Lines in Theory and Practice," Papers 133, World Bank - Living Standards Measurement.
  15. Hagenaars, Aldi J M & van Praag, Bernard M S, 1985. "A Synthesis of Poverty Line Definitions," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 31(2), pages 139-54, June.
  16. 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.
  17. 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.
  18. Rose, Richard & McAllister, Ian, 1996. "Is Money the Measure of Welfare in Russia?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(1), pages 75-90, March.
  19. van Praag, Bernard M. S., 1991. "Ordinal and cardinal utility : An integration of the two dimensions of the welfare concept," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 69-89, October.
  20. van Praag, Bernard & Goedhart, Theo & Kapteyn, Arie, 1980. "The Poverty Line-A Pilot Survey in Europe," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 461-65, August.
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