Estimating Utility: Consistent Poverty Lines with Applications to Egypt and Mozambique
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Estimating Utility : Consistent Poverty Lines with Applications to Egypt and Mozambique. / Arndt, Channing; Simler, Kenneth R.
In: Economic Development and Cultural Change, Vol. 58, No. 3, 2010, p. 449-474.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Estimating Utility
T2 - Consistent Poverty Lines with Applications to Egypt and Mozambique
AU - Arndt, Channing
AU - Simler, Kenneth R.
PY - 2010
Y1 - 2010
N2 - A fundamental premise of absolute poverty lines is that they represent the same level of utility through time and space. Disturbingly, a series of recent studies in middle- and low-income economies show that even carefully derived poverty lines rarely satisfy this premise. This article proposes an information-theoretic approach to estimating cost-of-basic-needs (CBN) poverty lines that are utility consistent. Applications to date illustrate that utility-consistent poverty measurements derived from the proposed approach and those derived from current CBN best practices often differ substantially, with the current approach tending to systematically overestimate (underestimate) poverty in urban (rural) zones.
AB - A fundamental premise of absolute poverty lines is that they represent the same level of utility through time and space. Disturbingly, a series of recent studies in middle- and low-income economies show that even carefully derived poverty lines rarely satisfy this premise. This article proposes an information-theoretic approach to estimating cost-of-basic-needs (CBN) poverty lines that are utility consistent. Applications to date illustrate that utility-consistent poverty measurements derived from the proposed approach and those derived from current CBN best practices often differ substantially, with the current approach tending to systematically overestimate (underestimate) poverty in urban (rural) zones.
KW - Faculty of Social Sciences
KW - poverty lines, entropy estimation, revealed preferences
U2 - 10.1086/650413
DO - 10.1086/650413
M3 - Journal article
VL - 58
SP - 449
EP - 474
JO - Economic Development and Cultural Change
JF - Economic Development and Cultural Change
SN - 0013-0079
IS - 3
ER -
ID: 18562606