Absolute Poverty: When Necessity Displaces Desire

Robert Allen

No _141, Oxford Economic and Social History Working Papers from University of Oxford, Department of Economics

Abstract: Abstract: This paper proposes a new method for defining an international poverty line based on explicit budgeting. The novel feature is that linear programming is used to deduce the diet that minimizes cost and guarantees survival. Nonfood items are also explicitly budgeted and amount to about one quarter of the cost of subsistence. A series of least cost diets are calculated with increasingly demanding nutritional requirements for twenty countries using prices from ICP 2011. The aim is to see which requirements rationalize the spending pattern of the poor. The ‘reduced basic’ model does the job. When the cost of the nonfood items are added to the cost of the ‘reduced basic’ diet, the resulting Linear Programming Poverty Line (LPPL) averages $1.88 per day across the poor countries in the sample. The same model rationalizes both the spending pattern of the poor and the World Bank Poverty Line. The LPPL has the advantages that it is (1) clearly related to survival and well being, (2) comparable across time and space since the same nutritional requirements are used everywhere, (3) adjusts consumption patterns to local prices, (4) presents no index number problems since solutions are always in local prices, and (5) requires only readily available information, namely, the prices in ICP or equivalent.

Keywords: Absolute poverty; Diet problem; Linear Programming; World Bank Poverty Line (search for similar items in EconPapers)
JEL-codes: I12 I32 (search for similar items in EconPapers)
Date: 2016-03-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ora.ox.ac.uk/objects/uuid:32fc7279-15d3-4ac4-8f53-8056f62a02dc (text/html)

Related works:
Journal Article: Absolute Poverty: When Necessity Displaces Desire (2017)
Working Paper: Absolute Poverty: When Necessity Displaces Desire (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oxf:esohwp:_141

Access Statistics for this paper

More papers in Oxford Economic and Social History Working Papers from University of Oxford, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Anne Pouliquen ( this e-mail address is bad, please contact ).