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A Bayesian Subjective Poverty Line, One Dollar a Day Revisited

Author

Listed:
  • Zhou Xun

    (Aix-Marseille University (Aix-Marseille School of Economics), GREQAM, EHESS.)

  • Michel Lubrano

    (Aix-Marseille University (Aix-Marseille School of Economics), GREQAM-CNRS, EHESS)

Abstract

This paper provides a new estimation of an international poverty line based on a Bayesian approach. We found that the official poverty lines of the poorest countries are related to the countries’ mean consumption level. This new philosophy is to be compared to the previous assumptions made by the World Bank in favour of an absolute poverty line. We propose a new international poverty line at $1.48 per day (2005 PPP) based on a reference group consumption level. This figure is much higher than that proposed by the World Bank ($1.25 in 2005 PPP), but still within a reasonable confidence interval. By this standard, there are more than 1.7 billion people living in poverty.

Suggested Citation

  • Zhou Xun & Michel Lubrano, 2013. "A Bayesian Subjective Poverty Line, One Dollar a Day Revisited," AMSE Working Papers 1302, Aix-Marseille School of Economics, France, revised 05 Feb 2013.
    • Handle: RePEc:aim:wpaimx:1302
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    References listed on IDEAS

    as
    1. Bruce E. Hansen, 2000. "Sample Splitting and Threshold Estimation," Econometrica, Econometric Society, vol. 68(3), pages 575-604, May.
    2. Martin Ravallion & Gaurav Datt & Dominique van de Walle, 1991. "Quantifying Absolute Poverty In The Developing World," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(4), pages 345-361, December.
    3. Van Praag, Bernard, 1971. "The welfare function of income in Belgium: An empirical investigation," European Economic Review, Elsevier, vol. 11(3), pages 337-369.
    4. Van den Bosch, Karel & Callan, Tim & Estivill, Jordi & Hausman, Piette & Jeandidier, Bruno & Muffels, Ruud & Yfantopoulos, John, 1993. "A Comparison of Poverty in Seven European Countries and Regions Using Subjective and Relative Measures," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(3), pages 235-259.
    5. Arie Kapteyn & Peter Kooreman & Rob Willemse, 1988. "Some Methodological Issues in the Implementation of Subjective Poverty Definitions," Journal of Human Resources, University of Wisconsin Press, vol. 23(2), pages 222-242.
    6. Shaohua Chen & Martin Ravallion, 2010. "The Developing World is Poorer than We Thought, But No Less Successful in the Fight Against Poverty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(4), pages 1577-1625.
    7. repec:bla:revinw:v:37:y:1991:i:4:p:345-61 is not listed on IDEAS
    8. Bauwens, Luc & Lubrano, Michel & Richard, Jean-Francois, 2000. "Bayesian Inference in Dynamic Econometric Models," OUP Catalogue, Oxford University Press, number 9780198773139.
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    Keywords

    Poverty line; Bayesian inference.;

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