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Poverty comparisons with non-compatible data: theory and illustrations, Volume 1
 
Author:Lanjouw, Jean Olson; Lanjouw, Peter; Country:Pakistan; El Salvador; Ecuador;
Date Stored:1997/01/01Document Date:1997/01/31
Document Type:Policy Research Working PaperSubTopics:Environmental Economics & Policies; Poverty Reduction Strategies; Achieving Shared Growth; Poverty Assessment; Poverty Lines; Health Economics & Finance; Services & Transfers to Poor; Public Health Promotion
Language:EnglishMajor Sector:(Historic)Social Protection
Region:South Asia; Latin America & CaribbeanReport Number:WPS1709
Sub Sectors:Other Social ProtectionCollection Title:Policy, Research working paper ; no. WPS 1709
Volume No:1  

Summary: Comparisons of poverty rates are only rarely based on identical underlying definitions of welfare. The authors examine the sensitivity of poverty rates calculated from alternative definitions of consumption. They consider what theory can say about the direction of bias in comparisons and show that under certain conditions robust comparisons are possible. Data from Ecuador, El Salvador, and Pakistan show that the magnitude of biases can be substantial. Their robustness result is used as a baseline to explore the tradeoffs involved in aggregating noisy expenditure components. Although nonfood expenditures are often thought to be especially poorly measured, the authors' data indicate that the more comprehensive is the measure of consumption spending, the better it is as a measure of welfare.

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