Lower Inequality and Lower Development: A Contradiction Sensitivity Analysis of Jammu and Kashmir

Mushtaq Saeed Owais (), Iqbal Khan Javaid and Majeed Mehak ()
Additional contact information
Mushtaq Saeed Owais: Department of Economics, University of Kashmir, Jammu and Kashmir, India
Iqbal Khan Javaid: Faculty, Department of Economics, University of Kashmir, Jammu and Kashmir, India
Majeed Mehak: Department of Economics, Islamic University of Science & Technology, Jammu and Kashmir, India

Statistics, Politics and Policy, 2022, vol. 13, issue 3, 315-345

Abstract: The standard method of poverty estimation uses unadjusted per capita income or expenditure to calculate population below the poverty line. However, recent empirical advancements have validated this method to be essentially flawed in nature. It does not take into consideration nor allows for household composition and economies of scale. Empirical investigations have confirmed the facts that the measures of poverty and inequality are sensitive to various choices of equivalence scales. Therefore, standard measures provide mostly overestimated poverty and inequality estimates. Further, poverty measurement across groups or overtime is sensitive to different poverty lines and measures. Any alteration in these can reverse the ranking. The current research attempts to test adult equivalence and scale economies in Jammu and Kashmir region to validate whether poverty estimates are sensitive to these scales or not. It also employs stochastic dominance technique to check whether poverty reduction is robust through time over a wide range of poverty lines and measures. The paper does so by employing three waves of monthly consumption expenditure rounds conducted by National Sample Survey Organization. For sensitivity analysis, the paper estimates FGT, Gini and Atkinson indices. Despite being industrially backward and politically fragile, J&K has shown better economic indicators than most other Indian states. The findings of the current study validate lower poverty in the region and at the same time discover a growth in inequality over time. While a mixed result is derived for adult equivalence, the economies of scale highlight the fact that standard measures are overstated and welfare rank reversal ensues when household size and gender of household is tested for. Further, stochastic dominance results show that poverty reduction is only robust during 61st and 66th round, and not during 66th and 68th rounds.

Keywords: poverty; inequality; adult equivalence scales; economies of scale (search for similar items in EconPapers)
JEL-codes: D63 I32 P43 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/spp-2022-0001 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
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:bpj:statpp:v:13:y:2022:i:3:p:315-345:n:5

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/spp/html

DOI: 10.1515/spp-2022-0001

Access Statistics for this article

Statistics, Politics and Policy is currently edited by Joel A. Middleton

More articles in Statistics, Politics and Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().