Absolute Poverty When Necessity Displaces Desire

A new basis for an international poverty measurement is proposed based on linear programming for specifying the least cost diet and explicit budgeting for nonfood spending. This approach is superior to the World Bank’s $1-a-day line because it is (i) clearly related to survival and well being; (ii)...

Full description

Saved in:
Bibliographic Details
Published inThe American economic review Vol. 107; no. 12; pp. 3690 - 3721
Main Author Allen, Robert C.
Format Journal Article
LanguageEnglish
Published Nashville American Economic Association 01.12.2017
American Economic Assoc
Subjects
Budgets
Consumption patterns
Diet
Economic theory
Linear programming
Measurement
Poverty
Prices
Well being
Online AccessGet full text
ISSN0002-8282
1944-7981
DOI10.1257/aer.20161080

Cover

More Information
Summary:A new basis for an international poverty measurement is proposed based on linear programming for specifying the least cost diet and explicit budgeting for nonfood spending. This approach is superior to the World Bank’s $1-a-day line because it is (i) clearly related to survival and well being; (ii) comparable across time and space since the same nutritional requirements are used everywhere while nonfood spending is tailored to climate; (iii) adjusts consumption patterns to local prices; (iv) presents no index number problems since solutions are always in local prices; and (v) requires only readily available information. The new approach implies much more poverty than the World Bank’s, especially in Asia.
Bibliography:ObjectType-Article-1
SourceType-Scholarly Journals-1
ObjectType-Feature-2
content type line 14
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.20161080