deaton_ measuring poverty

8/17/2019 Deaton_ Measuring Poverty

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Measuring Poverty

Angus Deaton

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u n o a [ E D O ] U O S S i p j ‘ U I E j S o j d p o o j ( J S J I J U E ^ J S E ^ ) E X E p o X j U y

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u i q ^ n g - u i s q j j j o d d n s o j s u o s 3 A E q o j j o u q S n o u s s j e u i i j j o j S M o p r n u E i p u j s e q D n s ‘ s u o i j e d o | D y p s d s u i s d n o j S s j q E J s u j n A s j e s j s q x ' X j j s p p s j e j o X j y i q E S i p u i j s j - S u o j e u j o j j j s j j n s

s s n E D s q > ] j o m j o u u e d o q M S [ d o s d u s j j o s j e j o o d s q x s s u a s

s j j n s s j s q j j n q ‘ s j o q q S i s u j p q j u j o j j s j s s s e s u j o s [ e s d u o d s ( d o s d

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Measuring Poverty

Yet even the po ore st buy thing s othe r than foo d— clothing and h

obviously— as well as an increasing n um be r of goods tha t ar

classified as necessities. For example, the average household spent 70% of its budget on food in 1983, but only 62% in 1

which time 31% of households owned a radio and 19% a t

people becom e bette r off, and even while they are still poor b

dards, they spend a sm aller fraction o f their budgets on food—

lenown as Engel’s Law, after E rns t Engel, who first no ted it in economic gro w th m akes it increasingly difficult to think of po

in terms of food, certainly in rich countries such as the United

in 2001 the typical household spent only 13.5% of its budget

also increasingly in po or cou ntries tha t are becom ing less poor,

Even so, the rhetorical link between hunger and poverty re


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s j a j j i p j E q j j d e j s q j j o j s p s u i s q o s j e j s n u i 3 d u e m o [ ] e 3 i u o §

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I U l U i p E 3 q j X q 3 S n U I X p E 3 J [ E 3 n | E A E O J 3 S O p S E M 3 U I [ X j J 3 A o d

s o j j s p j o u i ^ p s j s n í p E ^ s e m U E | d p o o j s q j ‘ s j u n o D D E s u j o s

q S n o q x ) ' p o o j u s q j j s q j o s p o o S j o j m o [ ] e o j 3 3 j q j X q p s q d i j

q D i q M ‘ s j n j j n D u S y j o j u s u i j J E d s Q s q j X q p a p u a u i i u o D S J U E | d u e u i o j j j n q u i j o u s i j o j e d e u j o j j j o u S u i j j e j s X q j a s s e m 3 U i |

J E J S P 3 J I U Q 3 q j U [ p o q j s u i 3 1 J 0 J E D 3 q j J O S J U E I J E A 3 J E 3 J 3 q X

j o o d u o u s e 3 J 0 U J q j i M a j d o s d

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A O d 3 J n j i p U 3 d x 3 J O 3 U J O D U I 3 q j S 3 U J O D 3 q q D i q M ‘ S D C E J E J U O Z I J O q S u i p u o d s s j J O D s q j o j p s D E J j U 3 q j s i s p c E [ e d i j j 3 a s q j u o j u i o d

3 l Í X ' S O T E J E D I J J 3 A 3 q j U O p A 3 [ 3 J Ü J i p U 3 d X 3 J O 3 U I O D U I j E q j J E s s i j o j e d s S e j s a e s q j p u E s i x e p j u o z u o q s q j S u o { E s j n j i p u s d

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Measuring Poverty

the nu m be r o f peo ple d esignated as po or, which, in the absenc

changes, would trigger additional progressive redistribution.

There are similar problems in adapting poverty lines over as over time. Urban people are typically more sedentary than

and so consume fewer calories at the same level of income. S

calorie standard is used for both urban and rural sectors, the

line will be higher. This sometimes leads to higher calculated

in cities than in the countryside, even when levels of living arlower in the latter and, indeed, when people are willingly mig

cities. Higher urban poverty lines make some sense because ur

usually higher, but once again the politics of “urban bias” oft

genial to overstate the number of poor people in the cities to ju

to groups w ho are vocal a nd wh o live close to the seats o


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q X j j a A O d a q j M o p q a j d o s d j o u o i j d e j j s q j X q p a S p n i s i p j O D a j M j u a u i u j a A o S X u e o j u a d o s i o i j d e j

s i q j ^ - j u n o D X j j a A O d

a q j o j

u s a o p j a q j o u j i q u i o j j X e m e X s u o u j S u d j e j ‘ j o o d s i a u o a u i o s

X j 3 a a q j u i o j j a u i O D u a A 3 p j n o D X s u o u j s i q x X j j a A O d j o j n o S n o u s j s n i ' s u q a q j M O ] a q j s n i a s o q j o j X a u o i u j o s j u n o u J E [ j e u j s o p p j n o D ‘ X j j a A o d S u p n p a j s q o j u a a s a q o j u a a ^ j s i j o ‘ p j E p

a j X j j a A o d e o j p | 3 q S u p q s i j n q X j j a A o d j n o q E [ j e j e j o u S 3 j e 3

A 0 S y o s S u i o p j o u j o j j u s u i n S j E p o o â J s q j o u E s i a j a q x • X p u a j a j j i p o s a j d o a d j e j i u i i s q o n s j E a j j o j a s u s s o u

S u p q o j a s o p s i s u o i j i p u o D q 3 i q M j o j a q j p u ‘ a u i o D u i s . u o s j s d X p s p a j d p j n o D s m j i u s a s p u E ‘ X p s n s j d 3 u q X j j S A o d a q j j a s

a A g ¿ s a D i A a p u m o j a q j o s i q o j y a j X p j E S a q u e d p u E d j a q o u x i s X q j o a a u a d x i s X q j a q j a q M ‘ j i a A o q s j s n i s i o q M a u o a u j o s

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Measuring Poverty

POVERTY AND GRO WTH

W hen th ere is eco no m ic grow th, in the sense of an increase insumption and average income, what happens to poverty depe

happens to the distribution of incom e an d consum ption. If e

comes grow together, then growth at the mean goes straight

reduction. If economic growth benefits only the rich, the d

income widens, and there will be no reduction in poverty in spithat growth among the rich means that average incomes are g

sometimes argued that income distribution changes only very sl

at least in the short run, growth automatically reduces poverty.

argument, it is possible to measure poverty from data on averag

expenditures; with the distribution fixed, incomes at the bottomi h


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Measuring Poverty

income growth. There were great successes in income growth

reduction in India in the 1990s, as there had been in the 19

reduction in infant mortality rates in India was less rapid in thin the 1980s, with the opposite true for education, where scho

rose rapidly, especially among girls. More generally, the rate

child mortality throughout the poor world was slower in the

the 1980s, in spite o f high er rates o f grow th o f GDP per capi

true that income growth is often a powerful agent for the reduincome poverty, it is neither necessary nor sufficient as we can

fact that health and educational poverty have been effectively

some poor places. Costa Rica, Cuba, China prior to the econo

a n d the Indian state of Kerala are the most often cited exampl

some cases, public provision can reduce poverty even at low i


10/13|jjqj J 0 J P U E s u o i j e z i u e S j o [ e u o i j e u j s j u i s q j j o j X j u i e u j ( n j s s n

U I E 3 A E q 3 M ‘ p E S J S U J ‘ X j J S A O d J O U O l J I U y s p | n j 3 S n E S I J E q M U O

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s q j í ( d e | s m ‘ s s p q o d X j J S A o d i j u E u i j i s s n p u E s u q X j J 3 A o d e j s s

j n E [ E D i j q o d p | j O M o u s i s j s q j s s n E D s q ‘ j E j n o i j j E d u ¡ - j j o j j s s q j i j E q j 3 n S j E s | d o s d s u j o s j E q j o s q s n u i o s ‘ j j n s q j i p X p i u s j j x s

s e p p O M s q j j o [ 3 a s | s q j j e p u s í s j q E s S E U E U i j n q p j s q s i j i

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j s j s p u f |


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Measuring Poverty

In particular, market exchange rates make the poor countri

poor relative to the rich ones, com pared with th e real differ

living standards. (For the same reason, it is a serious mistakmeasures o f world inequ ality using official exchange rates.) T

that (to simplify matters a little) market exchange rates are

supply and d em and of im po rts and exports; im po rters into Ind

and euros, which are supplied by exporters selling Indian good

market. The market exchange rate then ensures that goods thinto and out of India have prices in rupees that, when con

market exchange rate, are comparable with the world prices o

in dollars. But many goods that are important to poor peo

much of their food, all of their housing, and the services that

neither imported nor exported. Land, housing, and services tI di l b ( b th t I di i ) ld b t b jp


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Measuring Poverty

Africa, in the transition cou ntries o f Eastern Europe and the

Union, and most recently in some countries in Latin Amer

weight o f po pu lation in India and Ch ina do m inates in the While it would be true to say that, apart from those two coun

in the world is getting worse, it is also true tha t nearly ha

population lives in places where poverty is falling. O n the negat

is no progress or even negative progress in Africa, with incr

poverty accom panied by falling life expectancy associated w i

While few people would attribute the AIDS catastrophe to

economic globalization, we must likewise be careful not to

attribute to globalization the success of reduc tions in incom e po

the role of globalization in poverty reduction remains a hotly

deaton_ measuring poverty

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