On the Utility Consistency of Poverty Lines
Although poverty lines are widely used as deflators for inter-group welfare comparisons, their internal consistency is rarely given close scrutiny. A priori considerations suggest that commonly used methods cannot be relied on to yield poverty line...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/10/2778759/utility-consistency-poverty-lines http://hdl.handle.net/10986/18051 |
| Summary: | Although poverty lines are widely used
as deflators for inter-group welfare comparisons, their
internal consistency is rarely given close scrutiny. A
priori considerations suggest that commonly used methods
cannot be relied on to yield poverty lines that are
consistent in terms of utility, or for capabilities more
generally. The theory of revealed preference offers testable
implications of utility consistency for "poverty
baskets" under homogeneous preferences. A case study of
Russia's official poverty lines reveals numerous
violations of revealed preference criteria-violations that
are not solely attributable to heterogeneity in preferences
associated with climatic differences. |
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