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A Behaviour-Based Approach To The Estimation Of Poverty In India

Author

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  • Ingvild Almas

    (Norwegian School of Economics and Business Administration and University of Oslo, Bergen)

  • Anders Kjelsrud

    (ESOP, University of Oslo)

  • Rohini Somanathan

    (Department of Economics, Delhi School of Economics, Delhi, India)

Abstract

Since the late 1970s, the price indices underlying the poverty lines in India have been updated using aggregate indices. Widespread criticism of these indices led to the adoption of a new official methodology in 2011 based on unit values from con- sumption survey data. We propose an alternative approach that identifies poverty from consumer behaviour, based on the notion that equally poor households spend the same proportion of their incomes on food. Compared with official estimates, we find higher levels of poverty in eastern India, and generally, smaller reductions in poverty from 2005 to 2010. Our poverty numbers are validated by the calorie composition of households around the poverty lines and self-reported hunger.

Suggested Citation

  • Ingvild Almas & Anders Kjelsrud & Rohini Somanathan, 2013. "A Behaviour-Based Approach To The Estimation Of Poverty In India," Working papers 226, Centre for Development Economics, Delhi School of Economics.
    • Handle: RePEc:cde:cdewps:226
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    3. Amita Majumder & Ranjan Ray, 2020. "National and subnational purchasing power parity: a review," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(2), pages 103-124, June.
    4. Amita Majumder & Ranjan Ray & Sattwik Santra, 2016. "Global and Country Poverty Rates, Welfare Rankings of the Regions and Purchasing Power Parities: How Robust Are the Results?," Monash Economics Working Papers 11-16, Monash University, Department of Economics.
    5. Chen,Xiaomeng & Mungai,Rose & Nakamura,Shohei & Pearson,Thomas Patrick & Wambile,Ayago Esmubancha & Yoshida,Nobuo, 2020. "How Useful is CPI Price Data for Spatial Price Adjustment in Poverty Measurement? : A Case from Ghana," Policy Research Working Paper Series 9388, The World Bank.
    6. Gibson, John & Le, Trinh, 2019. "Using local expert knowledge to measure prices: Evidence from a survey experiment in Vietnam," MPRA Paper 92533, University Library of Munich, Germany.
    7. Majumder,Amita & Ray,Ranjan & Santra,Sattwik, 2015. "Preferences, purchasing power parity, and inequality : analytical framework, propositions, and empirical evidence," Policy Research Working Paper Series 7395, The World Bank.

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    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F01 - International Economics - - General - - - Global Outlook
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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