Should Consumption Sub-Aggregates be used to Measure Poverty? / Christiaensen, Luc.

Format:

Book

Government document

Author/Creator:

Christiaensen, Luc.

Contributor:

Christiaensen, Luc.

Ligon, Ethan.

Pave Sohnesen, Thomas.

Series:

Policy research working papers.

World Bank e-Library.

Language:

English

Subjects (All):

Consumption.

Consumption Sub-Aggregate.

Engel Curve.

Living Standards.

Poverty Assessment.

Poverty Lines.

Poverty Measurement.

Poverty Monitoring and Analysis.

Poverty Reduction.

Local Subjects:

Consumption.

Consumption Sub-Aggregate.

Engel Curve.

Living Standards.

Poverty Assessment.

Poverty Lines.

Poverty Measurement.

Poverty Monitoring and Analysis.

Poverty Reduction.

Physical Description:

1 online resource (25 pages)

Place of Publication:

Washington, D.C. : The World Bank, 2020.

System Details:

data file

Summary:

Frequent measurement of poverty is challenging, as measurement often relies on complex and expensive expenditure surveys that try to measure expenditures on a comprehensive consumption aggregate. This paper investigates the use of consumption "sub-aggregates" instead. The use of consumption sub-aggregates is theoretically justified if and only if all the Engel curves are linear for any realization of prices. This is very stringent. However, it may be possible to empirically identify certain goods that happen to have linear Engel curves given prevailing prices, and when the effect of price changes is small, such a sub-aggregate might work in practice. The paper constructs such linear sub-aggregates using data from Rwanda, Tanzania, and Uganda. The findings show that using sub-aggregates is ill-advised in practice as well as in theory. This raises questions about the consistency of the poverty-tracking efforts currently applied across countries, since obtaining exhaustive consumption measures remains an unmet challenge.