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Determinants of the Growth Semi-Elasticity of Poverty Reduction

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  • Misselhorn, Mark
  • Klasen, Stephan

Abstract

In this paper we examine the mathematical relationship between growth and distributional change on absolute (i.e. percentage point) changes in FGT poverty measures assuming a log-normal distribution. We also test the empirical relationship of the derived semi-elasticities of growth and distributional change on poverty and find them to explain changes in poverty very well (in fact, better than a related study by Bourguignon (2003) that studied the 'regular' growth elasticity of poverty reduction). This relationship will allow us to predict where growth and distributional change will have the largest (absolute) impact on poverty reduction, which is very useful for predicting and analyzing progress towards meeting MDG1.

Suggested Citation

  • Misselhorn, Mark & Klasen, Stephan, 2006. "Determinants of the Growth Semi-Elasticity of Poverty Reduction," Proceedings of the German Development Economics Conference, Berlin 2006 15, Verein für Socialpolitik, Research Committee Development Economics.
    • Handle: RePEc:zbw:gdec06:4738
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    References listed on IDEAS

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    1. Florent BRESSON, 2006. "Poverty: Looking for the Real Elasticities," Working Papers 200618, CERDI.
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    5. Ravallion, Martin & Huppi, Monika, 1991. "Measuring Changes in Poverty: A Methodological Case Study of Indonesia during an Adjustment Period," The World Bank Economic Review, World Bank, vol. 5(1), pages 57-82, January.
    6. Kraay, Aart, 2006. "When is growth pro-poor? Evidence from a panel of countries," Journal of Development Economics, Elsevier, vol. 80(1), pages 198-227, June.
    7. Kakwani, Nanak, 1993. "Poverty and Economic Growth with Application to Cote d'Ivoire," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(2), pages 121-139, June.
    8. Rati Ram, 2006. "Growth Elasticity of Poverty: Alternative Estimates and a Note of Caution," Kyklos, Wiley Blackwell, vol. 59(4), pages 601-610, November.
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    More about this item

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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