THE MEASUREMENT OF POVERTY WITH GEOGRAPHICAL AND INTERTEMPORAL PRICE DISPERSION. EVIDENCE FROM RWANDA

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: It is not known to what extent welfare measures result from seasonal and geographical price differences rather than from differences in living standards across households. Using data from Rwanda in 1983, we show that the change in mean living standard indicators caused by local and seasonal price deflation is moderately significant at every quarter. By contrast, the differences in poverty measures caused by this deflation can be considerable, for chronic as well as transient or seasonal poverty indicators. Thus, poverty monitoring and anti-poverty targeting can be badly affected by inaccurate deflation of living standard data. Moreover, when measuring seasonal poverty, the deflation based on regional prices instead of local prices only partially corrects for spatial price dispersion. Using annual local prices instead of quarterly local prices only yields a partial deflation, which distorts the measure of poverty fluctuations across seasons and biases estimates of annual and chronic poverty.

Keywords: Measurement and Analysis of Poverty; Income Distribution; Personal Income Distribution (search for similar items in EconPapers)
JEL-codes: D31 I32 O15 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2005-03
New Economics Papers: this item is included in nep-afr and nep-dev
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http://www.ivie.es/downloads/docs/wpasad/wpasad-2005-11.pdf Fisrt version / Primera version, 2005 (application/pdf)

Related works:
Journal Article: THE MEASUREMENT OF POVERTY WITH GEOGRAPHICAL AND INTERTEMPORAL PRICE DISPERSION: EVIDENCE FROM RWANDA (2008)
Working Paper: The measurement of poverty with geographical and intertemporal price dispersion, Evidence from Rwanda (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2005-11

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