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Mind the Gap : Disparities in Assessments of Living Standards Using National Accounts and Household Surveys

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  • Prydz,Espen Beer,Jolliffe,Dean Mitchell,Serajuddin,Umar

Abstract

Estimates of average per capita consumption and income from national accounts differ substantially from corresponding measures of consumption and income from household surveys. Using a new compilation of more than 2,000 household surveys matched to national accounts data, this study finds that the gaps between the data sources are larger and more robust than previously established. Means of household consumption estimated from surveys are, on average, 20 percent lower than corresponding means from national accounts. The gap with gross domestic product per capita is nearly 50 percent. The gaps have increased in recent decades and are largest in middle-income countries, where annualized growth rates for consumption surveys are systematically lower than national accounts growth rates. The paper shows that the gaps in measures across these two sources have implications for assessments of economic growth, poverty, and inequality. The study finds that typical survey measures of consumption and income may exaggerate poverty reduction and underestimate inequality.

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  • Prydz,Espen Beer,Jolliffe,Dean Mitchell,Serajuddin,Umar, 2021. "Mind the Gap : Disparities in Assessments of Living Standards Using National Accounts and Household Surveys," Policy Research Working Paper Series 9779, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9779
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    1. Francisco H. G. Ferreira & Shaohua Chen & Andrew Dabalen & Yuri Dikhanov & Nada Hamadeh & Dean Jolliffe & Ambar Narayan & Espen Beer Prydz & Ana Revenga & Prem Sangraula & Umar Serajuddin & Nobuo Yosh, 2016. "A global count of the extreme poor in 2012: data issues, methodology and initial results," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(2), pages 141-172, June.
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    Cited by:

    1. Kibrom A Abay & Nishant Yonzan & Sikandra Kurdi & Kibrom Tafere, 2023. "Revisiting Poverty Trends and the Role of Social Protection Systems in Africa during the COVID-19 Pandemic," Journal of African Economies, Centre for the Study of African Economies, vol. 32(Supplemen), pages 44-68.
    2. Abay,Kibrom A. & Yonzan,Nishant & Kurdi,Sikandra Smith & Hirfrfot,Kibrom Tafere, 2022. "Revisiting Poverty Trends and the Role of Social Protection Systems in Africa during theCOVID-19 Pandemic," Policy Research Working Paper Series 10172, The World Bank.

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