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On the utility consistency of poverty lines
 
Author:Ravallion, Martin; Lokshin, Michael; Collection Title:Policy, Research working paper ; no. WPS 3157
Country:Russian Federation; Date Stored:2003/11/19
Document Date:2003/10/01Document Type:Policy Research Working Paper
SubTopics:Health Information & Communications Technologies; Environmental Economics & Policies; Poverty Reduction Strategies; Achieving Shared Growth; Poverty Lines; Poverty Assessment; Health Indicators; Services & Transfers to Poor; Urban Partnerships & PovertyLanguage:English
Region:Europe and Central AsiaReport Number:WPS3157
Volume No:1 of 1  

Summary: Although poverty lines are widely used as deflators for inter-group welfare comparisons, their internal consistency is rarely given close scrutiny. A priori considerations suggest that commonly used methods cannot be relied on to yield poverty lines that are consistent in terms of utility, or for capabilities more generally. The theory of revealed preference offers testable implications of utility consistency for "poverty baskets" under homogeneous preferences. A case study of Russia's official poverty lines reveals numerous violations of revealed preference criteria-violations that are not solely attributable to heterogeneity in preferences associated with climatic differences.

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