Household welfare measurement and the pricing of basic services

About

Countries

Data & Research

Learning

News

Projects & Operations

Publications

Topics

Home > Data & Research > Author Profile > Report Details

Household welfare measurement and the pricing of basic services, Volume 1

Author:	Hentschel, Jesko; Lanjouw, Peter;	Collection Title:	Policy, Research working paper ; no. WPS 2006
Country:	Ecuador;	Date Stored:	2000/02/24
Document Date:	1998/11/30	Document Type:	Policy Research Working Paper
Language:	English	Major Sector:	(Historic)Social Protection
Region:	Latin America & Caribbean	Report Number:	WPS2006
Sub Sectors:	Other Social Protection	SubTopics:	Environmental Economics & Policies; Water Conservation; Economic Theory & Research; Water and Industry; Town Water Supply and Sanitation; Health Economics & Finance
Volume No:	1

Summary: The authors discuss when and how to adjust expenditures derived from household surveys to reflect the consumption of basic services. They discuss simple adjustment methods for markets that are subsidized, rationed, or subject to increasing marginal tariff pricing. Using Ecuador as an example, they show how incorporating adjustments in markets for water, electricity, and cooking gas can significantly alter estimates of poverty and are therefore important to comprehensive measure of welfare. For Ecuador, adjustments must be made for water, for example, because the nonpoor urban population often has access to subsidized public water and the poor depend on the private market; adjustments must be made for electricity because increasing marginal tariff rates lead to different prices per kilowatt-hour (kwh). Adjustments need not be made for cooking gas, which is highly subsidized in Ecuador, because the amount consumers use is not rationed. The authors compare the sensitivity of poverty indicators and the poverty profile in Ecuador to adjustments in nominal expenditures for basic services in Ecuador. The poverty indicators (headcount and the poverty gap for extreme poverty) showed changes that were statistically significant. The results dramatize how important it is to carefully analyze markets for basic services when deriving welfare measures from household surveys. Such adjustments, by improving the measure of welfare, can also encourage wider acceptance and use of consumption as welfare indicator and a guide for developing public policy.


Official Documents Official, scanned versions of documents (may include signatures, etc.)
File Type		Description	File Size (mb)

	PDF 28 pages	Official version*	1.96 (approx.)
	Text	Text version**


Light-Weight Documents Lighter (less MB) documents which may or may not be the final, official version
File Type		Description	File Size (mb)

	PDF 23 pages	WPS2006	0.06

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.

** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.

Permanent URL for this page: http://go.worldbank.org/G5VZMSVRI0