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Equivalence Scale and Poverty Assessment in a Poor Country

Arsenio Balisacan

No 199204, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: The paper uses household expenditure pattern to estimate equivalence scales for the cost of children in Philippine rural and urban areas. It then employs these estimates in determining aggregate poverty. The paper shows that the practice of assessing aggregate poverty based on total household expenditure (or income) tends to substantially overstate aggregate poverty. In the absence of applicable equivalence scales, much improvement in aggregate poverty assessment in poor countries can be obtained if some attempts are made to fully adjust even only for household size.

Date: 1992-03
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Published as UPSE Discussion Paper No. 1992-04, March 1992

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