Poverty Measurement in India and Bangladesh: a Great Indian Rope Trick?. Seminar presentation IDPM, University of Manchester, 09/10/07 Richard Palmer-Jones, School of Development Studies, University of East Anglia, Norwich, NR4 7TJ
Seminar presentation IDPM, University of Manchester, 09/10/07
Richard Palmer-Jones,School of Development Studies,University of East Anglia,Norwich, NR4 7TJ
With acknowledgements but no inculpation of Amaresh Dubey, or Kunal Sen, sometime partners in this ….
the Indian rope trick is “[S]ometimes described as "the world’s greatest illusion"”. Its origins are obscure but our use of it is to suggest that and claim that current methods provide a reliable basis for poverty lines and poverty aggregates that represent a comparable standard of welfare is an illusion
This is usually estimated from a regression of reported (constructed)
expenditure per capita on reported (constructed) per capita calorie “consumption”
DCI HCR poverty is the ratio of population with c < cnorm / total population
Where zf is the food poverty line, yi is total expenditure, and d are demographic variables
And f(yi) is food expenditure
1: updated by Sen and Mujeri; based on critique of FEI & DCI for 1995/6 & 2000/1
2. median “unit values” for rural and urban sectors for 11 “composite” groups of items
Hicksian demand curves (utility compensated) show fall in demand for calories
with fall in relative price of non-calories
FEI poverty line expenditure is higher than utility compensated expenditure
Hicksian demand curves disappear with zero utility compensated substitution.
Deaton (and Tarrozi)’s method compensated substitution.
Suppose we treat Deaton’s method as calculating the urban cost of the food expenditure
of rural households’ food expenditure, what should we add as an allowance for non-food?
Would it be the non-food share of urban households whose food expenditure was equivalent
In real terms to the the food expenditure of rural households?