A cross-country study of household poverty and inequality on unit record household budget data

Economic Development and Cultural Change

Volumn 48, Issue 1, 1999, Pages 176-208

  Lancaster, Geoffrey ^a   Ray, Ranjan ^a   Valenzuela, Maria Rebecca ^a,b  

^a UNIVERSITY OF TASMANIA   (Australia)

^b UNIVERSITY OF MELBOURNE   (Australia)

Author keywords

[No Author keywords available]

Indexed keywords

HOUSEHOLD INCOME; METHODOLOGY; POVERTY; SOCIOECONOMIC INDICATOR;

EID: 0033371332     PISSN: 00130079     EISSN: None     Source Type: Journal    
DOI: 10.1086/452451     Document Type: Article

References (37)

1. See Brigitte Buhmann, Lee Rainwater, Guenther Schmaus, and Timothy M. Smeeding, "Equivalence Scales, Well-Being, Inequality and Poverty: Sensitivity Estimates across Ten Countries Using the Luxembourg Income Study (LIS) Database," Review of Income and Wealth 94 (1988): 115-42;
2. F. A. E. Coulter, F. A. Cowell, and S. P. Jenkins, "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal 102 (1992): 1067-82;
3. James Banks and Paul Johnson, "Equivalence Scale Relativities Revisited," Economic Journal 104 (1994): 883-90;
4. Geoffrey Lancaster, Ranjan Ray, and Maria Rebecca Valenzuela, "A Cross Country Study of Equivalence Scales and Expenditure Inequality on Unit Record Household Budget Data," Discussion Paper no. 1997-03 (University of Tasmania, Department of Economics, Hobart 1997);
5. Klaas De Vos and M. Asghar Zaidi, "Equivalence Scale Sensitivity of Poverty Statistics for the Member States of the European Community," Review of Income and Wealth 43, no. 3 (1997): 319-34.
6. See Paul McGregor and Vani K. Barooah, "Is Low Spending or Low Income a Better Indicator of Whether or Not a Household Is Poor: Some Results from the 1985 Family Expenditure Survey," Journal of Social Policy 21, no. 1 (1992): 53-69; Daniel T. Slesnick, "Consumption, Needs and Inequality," International Economic Review 35, no. 3 (1994): 677-703; David Johnson and Stephanie Shipp, "Inequality and the Business Cycle: A Consumption Viewpoint," Empirical Economics 24, no. 1 (1999): 173-78.
7. See Paul McGregor and Vani K. Barooah, "Is Low Spending or Low Income a Better Indicator of Whether or Not a Household Is Poor: Some Results from the 1985 Family Expenditure Survey," Journal of Social Policy 21, no. 1 (1992): 53-69; Daniel T. Slesnick, "Consumption, Needs and Inequality," International Economic Review 35, no. 3 (1994): 677-703; David Johnson and Stephanie Shipp, "Inequality and the Business Cycle: A Consumption Viewpoint," Empirical Economics 24, no. 1 (1999): 173-78.
8. See Paul McGregor and Vani K. Barooah, "Is Low Spending or Low Income a Better Indicator of Whether or Not a Household Is Poor: Some Results from the 1985 Family Expenditure Survey," Journal of Social Policy 21, no. 1 (1992): 53-69; Daniel T. Slesnick, "Consumption, Needs and Inequality," International Economic Review 35, no. 3 (1994): 677-703; David Johnson and Stephanie Shipp, "Inequality and the Business Cycle: A Consumption Viewpoint," Empirical Economics 24, no. 1 (1999): 173-78.
9. The methodology and the scale estimates are reported and discussed in the study by Lancaster et al.
10. See Anton P. Barten, "Family Composition, Prices and Expenditure Patterns," in Econometric Analysis for National Economic Planning, ed. P. E. Hart, G. Mills, and J. K. Whitaker (London: Butterworth, 1964), pp. 277-92; and W. M. Gorman, "Tricks with Utility Functions," in Essays in Economic Analysis, ed. M. J. Artis and A. R. Nobay (Cambridge: Cambridge University Press, 1976), pp. 211-43.
11. See Anton P. Barten, "Family Composition, Prices and Expenditure Patterns," in Econometric Analysis for National Economic Planning, ed. P. E. Hart, G. Mills, and J. K. Whitaker (London: Butterworth, 1964), pp. 277-92; and W. M. Gorman, "Tricks with Utility Functions," in Essays in Economic Analysis, ed. M. J. Artis and A. R. Nobay (Cambridge: Cambridge University Press, 1976), pp. 211-43.
12. See Ranjan Ray, "Measuring the Costs of Children: An Alternative Approach," Journal of Public Economics 22 (1983): 89-102.
13. This was introduced by James Banks, Richard Blundell, and Arthur Lewbel, "Quadratic Engel Curves, Welfare Measurement and Consumer Demand," discussion paper (Institute for Fiscal Studies, London, 1992).
14. See Geoffrey Lancaster and Ranjan Ray, "Comparison of Alternative Models of Household Equivalence Scales: The Australian Evidence on Unit Record Data," Economic Record 74 (1998): 1-14, for details on derivation.
15. The demographic demand parameter estimates and the equivalence scales for each country are presented in the study by Lancaster et al.
16. See, e.g., Jean Dreze and P. V. Srinivasan, "Widowhood and Poverty in Rural India: Some Inferences from Household Survey Data," Journal of Development Economics 54, no. 2 (1997): 217-34; R. Ray, "Expenditure Behaviour of Households and Welfare of Children and Widows in Pakistan, South Africa: A Study on Unit Record Data," Discussion Paper no. 1997-04 (University of Tasmania, Department of Economics, Hobart 1997); and the studies by Buhmann et al.; and by Lancaster et al.
17. See, e.g., Jean Dreze and P. V. Srinivasan, "Widowhood and Poverty in Rural India: Some Inferences from Household Survey Data," Journal of Development Economics 54, no. 2 (1997): 217-34; R. Ray, "Expenditure Behaviour of Households and Welfare of Children and Widows in Pakistan, South Africa: A Study on Unit Record Data," Discussion Paper no. 1997-04 (University of Tasmania, Department of Economics, Hobart 1997); and the studies by Buhmann et al.; and by Lancaster et al.
18. See A. F. Shorrocks, "Inequality Decomposition by Population Subgroups," Econometrica 22 (1984): 1369-86.
19. This class of poverty index was proposed by James Foster, Joel Greer, and Erik Thorbecke, "A Class of Decomposable Poverty Measures," Econometrica 52 (1984): 761-66.
20. See Margaret E. Grosh and Paul Glewwe, "A Guide to Living Standards Measurement Study Surveys and Their Data Sets," LSMS Working Paper no. 120 (World Bank, Washington, D.C., 1995).
21. See M. R. Valenzuela, "Alternative Approaches to the Estimation of Household Equivalence Scales: An Australian Application" (Ph.D. diss., University of New England, Australia, 1997), for more details on the Philippine and Thai data sets.
22. See ISTAT, "Indagine sui consumi delle famiglie documentazione tecnica e descrizione del file standard gerarchico, anni, 1987-1994"(Family Consumption Survey: Technical notes and description of the hierarchical standard files, years 1987-94; ISTAT [Instituto Centrale di Statistical, Rome, 1996), for more details on the Italian data set.
23. This case was considered in the studies by Buhmann et al.; and by De Vos and Zaidi (both cited in n. 1).
24. See, e.g., the studies by Buhmann et al., by Coulter et al. (n. 1 above); and by De Vos and Zaidi.
25. 1 as discussed in the text. See also Martin Ravallion, Gaurav Datt, and Dominique van de Walle, "Quantifying Absolute Poverty in the Developing World," Review of Income and Wealth 37 (1991): 345-61, for a discussion of this issue.
26. See, e.g., the study by Coulter et al.
27. See our study in n. 1.
28. A similar observation was made by Ray in the study "Expenditure Behaviour of Households," (n. 9 above) in which widows in Pakistan and South Africa were found to experience large poverty increases in the presence of significant economies of scale (i.e., low φ values) of composition-adjusted household size.
29. 0, of 0.333 reported for India in table 3 is in line with the Gini coefficient of per capita consumer expenditure for the various Indian states reported in table A3 of Jean Dreze and Amartya K. Sen, Indian Economic Development and Social Opportunity (Oxford: Clarendon Press, 1995).
30. 0, of 0.333 reported for India in table 3 is in line with the Gini coefficient of per capita consumer expenditure for the various Indian states reported in table A3 of Jean Dreze and Amartya K. Sen, Indian Economic Development and Social Opportunity (Oxford: Clarendon Press, 1995).
31. See Martin Ravallion and Gaurav Datt, "India's Checkered History in Fight against Poverty: Are There Lessons for the Future?" Economic and Political Weekly 31, special issue nos. 35, 36, 37 (1996): 2479-85. This study reports (table 1) that the head count ratio of poverty for all India in 1992 was quite close to the poverty estimate recorded in 1983, which is the period considered in this study.
32. See S. R. Hashim, "Economic Growth and Income Distribution: The Indian Experience of Development," Economic and Political Weekly 33, no. 2 (1998): 661-66.
33. See, e.g., table 1 (pp. 214-15) of The World Development Report (Oxford: Oxford University Press, 1997).
34. In the case of the Philippines, we had to omit a number of observations because of their poor quality. Since no systematic bias arose from the omission of these observations from the sample, the somewhat lower figure of 76% for the Philippines did not present any real problem of noncomparability.
35. Examples include the study by Buhmann et al. (n. 1 above), and that by Ravallion et al. (n. 17 above).
36. See, e.g., the cross-country study by S. Anand and M. Ravallion, "Human Development in Poor Countries: On the Role of Private Incomes and Public Services," Journal of Economic Perspectives 7, no. 1 (1993): 133-50.
37. See Amartya K. Sen, "From Income Inequality to Economic Inequality," Southern Economic Journal 64, no. 2 (1997): 384-401.