Welfare-Consistent Global Poverty Measures

Martin Ravallion and Shaohua Chen

No 23739, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The paper provides new measures of global poverty that take seriously the idea of relative-income comparisons but also acknowledge a deep identification problem when the latent norms defining poverty vary systematically across countries. Welfare-consistent measures are shown to be bounded below by a fixed absolute line and above by weakly-relative lines derived from a theoretical model of relative-income comparisons calibrated to data on national poverty lines. Both bounds indicate falling global poverty incidence, but more slowly for the upper bound. Either way, the developing world has a higher poverty incidence but is making more progress against poverty than the developed world.

JEL-codes: I32 (search for similar items in EconPapers)
Date: 2017-08
New Economics Papers: this item is included in nep-ltv
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Working Paper: Welfare-consistent global poverty measures (2017)
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