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Income elasticity of poverty in developing countries: updated estimates from new data

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  • Rati Ram

Abstract

New data on poverty released by World Bank in March 2012 are used to provide estimates of income (growth) elasticity of poverty for 2005--2008 and to compare these with two earlier periods. Five points are noted. First, there is a big drop in the overall elasticity for developing countries for 2005--2008, indicating a considerably weaker response of poverty to increased income. Second, the drop is particularly sharp for $1.25 poverty rate but is fairly substantial for $2.00 line also. Third, the fall largely reflects a slowdown in poverty reduction in China from the extremely high declines in previous periods and the consequent drop in the elasticities for that country. Fourth, the elasticities, particularly that for $2.00 line, continue to be extremely low in poverty-dense India where $2.00 poverty rate is still higher than that even in sub-Saharan Africa (SSA). Fifth, the good progress towards the poverty goal of the Millennium Declaration is once again noted to be almost entirely due to the huge poverty declines that have occurred in China.

Suggested Citation

  • Rati Ram, 2013. "Income elasticity of poverty in developing countries: updated estimates from new data," Applied Economics Letters, Taylor & Francis Journals, vol. 20(6), pages 554-558, April.
  • Handle: RePEc:taf:apeclt:v:20:y:2013:i:6:p:554-558
    DOI: 10.1080/13504851.2012.718053
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    References listed on IDEAS

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    1. World Bank, 2002. "Global Economic Prospects and the Developing Countries 2002," World Bank Publications - Books, The World Bank Group, number 14050.
    2. World Bank, 2012. "World Development Indicators 2012," World Bank Publications - Books, The World Bank Group, number 6014.
    3. World Bank, 2002. "World Development Indicators 2002," World Bank Publications - Books, The World Bank Group, number 13921.
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    Cited by:

    1. Rati Ram, 2016. "Income and Multidimensional Poverty in Developing Countries: A Cross-Sectional Perspective," Journal of Social Economics, Research Academy of Social Sciences, vol. 3(4), pages 198-202.
    2. Channing Arndt & Kristi Mahrt & Caroline Schimanski, 2017. "On the poverty-growth elasticity," WIDER Working Paper Series wp-2017-149, World Institute for Development Economic Research (UNU-WIDER).
    3. Patrick Guillaumont & Phu Nguyen‐Van & Thi Kim Cuong Pham & Laurent Wagner, 2023. "Equal opportunity and poverty reduction: How should aid be allocated?," Review of Development Economics, Wiley Blackwell, vol. 27(1), pages 550-607, February.
    4. Tarlok Singh, 2022. "Economic growth and the state of poverty in India: sectoral and provincial perspectives," Economic Change and Restructuring, Springer, vol. 55(3), pages 1251-1302, August.
    5. Channing Arndt & Kristi Mahrt & Caroline Schimanski, 2017. "On the poverty–growth elasticity," WIDER Working Paper Series 149, World Institute for Development Economic Research (UNU-WIDER).
    6. Bluhm R & Crombrugghe D.P.I. de & Szirmai A., 2013. "The pace of poverty reduction - A fractional response approach," MERIT Working Papers 2013-051, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Mark Fruin & Desi Peneva & Rati Ram, 2013. "Income elasticity of human development in ASEAN countries," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(4), pages 13-20, December.

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