Nov 22 International poverty

Nov 22 International poverty - International poverty:...

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International poverty: Defining and Measuring 1
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Not poor if can … purchase adequate and stable housing, participate as a citizen in the community, keep oneself and one’s family reasonably healthy, and provide the things that one’s children need to participate effectively in school Blank (2008) 2
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Defining poverty Generally, compare resources against needs How do you define needs? What resources do you count? 3
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How would you measure it? Income Consumption Assets Wealth Health Unmet needs Capabilities (Sen) 4
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Other considerations? Relative or absolute? Individual or household? Income, resources, assets, skills? Monthly, annual, lifetime? Account for changes over time? Cars, electricity, plumbing, personal computers, mobile phones, … what is next? 5
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1990 World Development Report Poverty defined by Material hardship (inadequate income or consumption) Low education Poor health Exposure to risk Lack of voice or power Sen’s concept of capabilities 6
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broadening the definition of poverty does not change significantly who is counted as poor (at least not in the aggregate) b/c of high correlation But does Help us understand the causes Identify strategies to reduce poverty Interactions mean broader strategy / policy set has bigger impacts on reducing poverty 7
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Income vs expenditure U.S. poverty measure based on income Low-income countries expenditure-based measure is preferred Consumption-smoothing Variation in consumption lower than for income Consumption from own-production Assign market value to home produced goods (such as food) 8
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Consumption smoothing Time Dollars Consumption Income 9
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“Dollar -a- Day” Poverty Line Allow us to measure the share of the population with adequate income to purchase a standard basket of goods Dollar amount adjusted according to prices in the country Purchasing Power Parity (PPP) Headcount (rate), depth and severity Requires national survey data Living Standards Measurement Surveys Other National Surveys $2 /day is more comparable to middle income poverty lines 10
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Purchasing Power Parity Another measure of exchange rate Want to value all goods and services in a single
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This note was uploaded on 09/07/2011 for the course ECON 375 taught by Professor Staff during the Fall '10 term at Maryland.

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Nov 22 International poverty - International poverty:...

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