Chapter

Absolute Poverty Lines

Channing Arndt, Kristi Mahrt and Finn Tarp

in Measuring Poverty and Wellbeing in Developing Countries

Published in print December 2016 | ISBN: 9780198744801
Published online January 2017 | e-ISBN: 9780191805967 | DOI: https://dx.doi.org/10.1093/acprof:oso/9780198744801.003.0002

Series: WIDER Studies in Development Economics


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Private consumption capabilities form only one facet of comprehensive living standards assessments, but they are an important facet whose measurement should be done well. Measurement is complex due to a multitude of methodological choices, which often interact with imperfect data and a desire for comparability through time. This chapter outlines ideas underpinning these choices with particular attention to the tensions between consistency and specificity. It also highlights a series of limitations associated with typical cost of basic needs approaches. Finally, it reaffirms that a ‘sensibly eclectic’ approach, employing multiple methods, is the best available mode for addressing these limitations. A first fundamental choice is whether to estimate an absolute poverty line at all. Consumption-based poverty metrics provide only a partial view into the welfare of individuals or households, which may or may not accord with other important facets of welfare.

Keywords: poverty measurement; poverty line estimation; utility consistency; cost of basic needs; consumption

Chapter.  5901 words.  Illustrated.

Subjects: Economic Development and Growth

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