Poor Results and Poorer Policy: A Comparative Analysis of Estimates of Global Inequality and Poverty

Bhalla, Surjit S.

doi:10.1093/cesifo/50.1.85

Cited by 10 publications

(11 citation statements)

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“…Bhalla (2002Bhalla ( , 2004 and Sala-i-Martin (2002, 2006 investigate various poverty measurement problems in great detail, and provide significantly lower estimates than those presented in World Bank (2000Bank ( , 2002, but fail to question the use of the Geary-Khamis method in the Penn World Table data that they rely on. Nor do Berry, Bourguignon, and Morrisson (1983) and Bourguignon and Morrisson (2002) question the Geary-Khamis method underlying the income data that they take from Maddison (1995) in their analysis of the shifting composition of the world's poor.…”

Section: Introductionmentioning

confidence: 90%

“…World Bank estimates of global poverty (see, for example, Chen and Ravallion, 2001) have involved first converting the IPL into local currencies using PPP exchange rates and then using nationally-representative surveys of household consumption to estimate the number of people living below these "national poverty lines". An alternative approach, used by Bhalla (2002Bhalla ( , 2004 and Sala-i-Martin (2002, 2006, involves converting national accounts per capita income data into a common currency using PPP exchange rates, and then using information on income quintile shares to impute an income distribution for each country, for comparison against the IPL. 6…”

Section: Evaluating Bias In the Gk And Eks Indexesmentioning

confidence: 99%

“…There has been much debate regarding the appropriate method for estimating world poverty, and we do not attempt to resolve the issues raised by authors such as Atkinson and Brandolini (2001), Bhalla (2004), Chen and Ravallion (2001), Deaton (2001Deaton ( , 2005, Ravallion (2003a,b), Reddy and Pogge (2003) and Sala-i-Martin (2006). Rather, we focus on an aspect that is common to both approaches outlined above (and, surprisingly, has not been addressed in the global poverty debate), namely, the impact of the choice of PPP method for converting currencies.…”

Section: Approaches For Estimating World Povertymentioning

confidence: 99%

“…The World Bank has taken primary responsibility in measuring progress towards this goal, and its approach for estimating world poverty has been widely discussed in recent years by authors such as Atkinson and Brandolini (2001), Bhalla (2004), Chen and Ravallion (2001), Deaton (2001Deaton ( , 2005, Ravallion (2003a,b), Reddy and Pogge (2003) and Sala-i-Martin (2006). This paper draws on insights from the economic approach to index numbers to highlight the fact, little appreciated in most of the empirical work on global poverty, that global estimates of the number of people living in poverty and their distribution across countries and regions depend crucially on the purchasing power parities that are used to translate a common poverty line into local currencies.…”

Section: Introductionmentioning

confidence: 99%

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Measuring Global Poverty: Why PPP Methods Matter

Ackland

Dowrick

Freyens

2013

Review of Economics and Statistics

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We present theory and evidence to suggest that, in the context of analysing global poverty, the EKS approach to estimating purchasing power parities yields more appropriate international comparison of real incomes than the Geary-Khamis approach. Our analysis of the 1996 International Comparison Project data confirms that the Geary-Khamis approach leads to substantial overstatement of the relative incomes of the world's poorest nations and to misleading comparisons of poverty rates across regions. Similar bias is found in the Penn World Table which uses a modified version of the Geary-Khamis approach. Estimation of both the level of global poverty and its location is very sensitive to the choice of index. The EKS index of real income is much closer to being a true index of economic welfare and is therefore to be preferred for assessment of global poverty.

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Section: Introductionmentioning

confidence: 90%

Section: Evaluating Bias In the Gk And Eks Indexesmentioning

confidence: 99%

Section: Approaches For Estimating World Povertymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Measuring Global Poverty: Why PPP Methods Matter

Ackland

Dowrick

Freyens

2013

Review of Economics and Statistics

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“…rates of extreme poverty and faster poverty reduction (Chen and Ravallion (2010) and Bhalla (2004) for a discussion).…”

Section: The World Bank's International Poverty Measure and Its Assummentioning

confidence: 99%

International income poverty measurement: which way now?

et al. 2016

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Stephan Klasen*, Tatyana Krivobokova*, Friederike Greb**, Rahul Lahoti*, Syamsul Hidayat Pasaribu***, and Manuel Wiesenfarth**** August, 2015 Terms of use: Documents in AbstractIn this paper, we critically review conceptual and empirical issues surrounding the derivation of the international poverty line, expressed in PPP-adjusted dollars and linked to various rounds of the International Comparison of Prices (ICP). We find that there are some limitations in the current estimation of these lines, but show that statistically superior methods lead to lines that are relatively robust and confirm the $1.25 using 2005PPPs and suggest $1.67-1.71 using 2011PPPs; they also roughly confirm the current shape of the proposed 'weakly relative' poverty line. Using the new absolute line using 2011 PPPs would lead to substantially lower poverty in our estimation. The extent of the decline depends on whether and how one treats China, India, and Indonesia differently from other countries in the 2005 and 2011 PPPs. More seriously, we note that the dependence on the conceptual and empirical problems associated with the link to successive ICP rounds creates problems that have gotten worse over time so that we suggest that it would be best to consider alternatives to the current reliance on ICP rounds and the resulting PPPs. As a quick fix we propose to fix the international poverty line in national currencies using either the 2005 or 2011 level; in the medium term, we argue for global poverty measurement based on internationally coordinated national poverty measurement.

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Examining Inequality: Who Really Benefits from Global Growth?

Edward¹

2006

World Development

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Poor Results and Poorer Policy: A Comparative Analysis of Estimates of Global Inequality and Poverty

Cited by 10 publications

References 0 publications

Measuring Global Poverty: Why PPP Methods Matter

Measuring Global Poverty: Why PPP Methods Matter

International income poverty measurement: which way now?

Examining Inequality: Who Really Benefits from Global Growth?

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