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Poor, or just feeling poor ? on using subjective data in measuring poverty

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  • Ravallion, Martin

Abstract

The challenges faced in calibrating poverty and welfare measures to objective data have long been recognized. Until recently, most economists have resisted a seemingly obvious solution, namely to ask people themselves:"Do you feel poor?"The paper studies the case for and against this approach. It is argued that, while one would not want to use self-assessments as welfare metrics in their own right, there is scope for using such data to help calibrate multidimensional measures. Indeed, the idea of a"social subjective poverty line"(below which people tend to think they are poor, but above which they do not) is arguably the most conceptually appealing way of defining poverty. However, the paper points to a number of concerns that have received insufficient attention, including the choice of covariates, survey design issues, measurement errors, frame-of-reference effects, and latent heterogeneity in personality traits and personal tradeoffs. Directions for future research are identified.

Suggested Citation

  • Ravallion, Martin, 2012. "Poor, or just feeling poor ? on using subjective data in measuring poverty," Policy Research Working Paper Series 5968, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5968
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    References listed on IDEAS

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    1. repec:eee:wdevel:v:103:y:2018:i:c:p:297-310 is not listed on IDEAS
    2. Kafle, Kashi & Winter-Nelson, Alex & Goldsmith, Peter, 2016. "Does 25 cents more per day make a difference? The impact of livestock transfer and development in rural Zambia," Food Policy, Elsevier, vol. 63(C), pages 62-72.
    3. Zsoka Koczan, 2016. "Being Poor, Feeling Poorer; Inequality, Poverty and Poverty Perceptions in the Western Balkans," IMF Working Papers 16/31, International Monetary Fund.
    4. Mahadevan, Renuka & Hoang, Viet-Ngu, 2016. "The nexus between poverty and deprivation in Vietnam," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 290-303.
    5. Hirfrfot, Kibrom & Barrett, Christopher B. & Lentz, Erin C. & Taddesse, Birhanu, 2014. "The Subjective Well-being Effects of Imperfect Insurance that Doesn’t Pay Out," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 173478, Agricultural and Applied Economics Association.

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    Keywords

    Rural Poverty Reduction; Economic Theory&Research; Services&Transfers to Poor; Crime and Society;

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