Consumption Subaggregates Should Not Be Used to Measure Poverty

Luc Christiaensen, Ethan Ligon and Thomas Sohnesen

The World Bank Economic Review, 2022, vol. 36, issue 2, 413-432

Abstract: Frequent measurement of poverty is challenging because measurement often relies on complex and expensive expenditure surveys that try to measure expenditures on a comprehensive consumption aggregate. This paper investigates the use of consumption “subaggregates” instead. The use of consumption subaggregates is theoretically justified if and only if all Engel curves are linear for any realization of prices. This is very stringent. However, it may be possible to empirically identify certain goods that happen to have linear Engel curves given prevailing prices, and when the effect of price changes is small, such a subaggregate might work in practice. The paper constructs such linear subaggregates using data from Rwanda, Tanzania, and Uganda. The findings show that using subaggregates is ill advised in practice as well as in theory. This also raises questions about the consistency of the poverty tracking efforts currently applied across countries, since obtaining exhaustive consumption measures remains an unmet challenge.

Keywords: consumption subaggregates; poverty; Engel curves (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1093/wber/lhab021 (application/pdf)
Access to full text is restricted to subscribers.

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:oup:wbecrv:v:36:y:2022:i:2:p:413-432.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The World Bank Economic Review is currently edited by Eric Edmonds and Nina Pavcnik

More articles in The World Bank Economic Review from World Bank Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().