Aggregate Poverty Research Articles

MAPPING POVERTY HOT SPOTS IN PENINSULAR MALAYSIA USING SPATIAL AUTOCORRELATION ANALYSIS

In September 2000 The Millennium Summit adopted the UN Millennium Declaration, committing nations to a new global partnership to reduce extreme poverty with a deadline of 2015. Eight Millennium Development Goals were formulated of which the eradication of poverty given top priority. However, Malaysia's participation with the UN in dealing with poverty, precede this when it committed itself with the United Nations Decade for the Eradication of Poverty (1997-2006) programme, which was then reinforced when the Millennium Declaration was made in 2000. Nationally, poverty eradication as well as bridging the inequality gap among the major ethnic groups and states has been the main development goal in Malaysia's development agenda since independence. In this regards, the principle of “growth with equity has been the central theme in all Malaysia's development policies and efforts since independence. Although Malaysia has made significant achievements in reducing the incidence of aggregate poverty across the country from 8.9% in 1995 down to 1.7% in 2012, there still exist pockets of poverty in the rural areas, in certain states/regions and among ethnic groups, as well as in some urban areas. This shows that formulating planning and policy implementation to eradicate poverty now needs to be more spatially focused for the implementation to be more effective. Recognising the incidence of poverty through standard statistical data tables alone is no longer adequate in formulating planning and policy implementation. Through spatial autocorrelation analysis the pattern of distribution of poverty in space over a period of time can easily be visualised and hotspots of incidence of poverty identified. This paper attempts to show how this analysis can assist in focusing efforts to eradicate poverty in Malaysia.

Understanding the null‐to‐small association between increased macroeconomic growth and reducing child undernutrition in India: role of development expenditures and poverty alleviation

Empirical evidence suggests that macroeconomic growth in India is not correlated with any substantial reductions in the prevalence of child undernutrition over time. This study investigates the two commonly hypothesized pathways through which macroeconomic growth is expected to reduce child undernutrition: (1) an increase in public developmental expenditure and (2) a reduction in aggregate income‐poverty levels. For the anthropometric data on children, we draw on the data from two cross‐sectional waves of National Family Health Survey conducted in 1992–1993 and 2005–2006, while the data for per capita net state domestic product and per capita public spending on developmental expenditure and headcount ratio of poverty were obtained from the Reserve Bank of India and the Government of India expert committee reports. We find that between 1992–1993 and 2005–2006, state‐level macroeconomic growth was not associated with any substantial increases in public development expenditure or substantial reductions in poverty at the aggregate level. Furthermore, the association between changes in public development expenditure or aggregate poverty and changes in undernutrition was small. In summary, it appears that the inability of macroeconomic growth to translate into reductions in child undernutrition in India is likely a consequence of the macroeconomic growth not translating into substantial investments in development expenditure that could matter for children's nutritional status and neither did it substantially improve incomes of the poor, a group where undernutrition is also the highest. The findings here build a case to advocate a ‘support‐led’ strategy for reducing undernutrition rather than simply relying on a ‘growth‐mediated’ strategy. Key messages Increases in macroeconomic growth have not been accompanied by substantial increases in public developmental spending or reduction in aggregate poverty headcount ratio in India.Association between increases in public development expenditure or poverty headcount ratios and changes in child undernutrition, in particular, child stunting, is small to null.Reducing the burden of undernutrition in India cannot be accomplished solely relying on a growth‐mediated strategy, and a concerted support‐led strategy is required.

A multidimensional approach to child poverty in Taiwan

To elucidate the multidimensional nature of poverty, this study analyzed child deprivation and social exclusion in Taiwan. First, a fuzzy set approach was used to construct an aggregate poverty index, to measure the levels of perceived necessity, deprivation, and social exclusion experienced by children. The study involved conducting a decomposition analysis to measure the poverty index according to certain dimensions. Second, this study involved analyzing possible determinants of perceived necessity, deprivation, and social exclusion, using seemingly unrelated regression models. We used cross-sectional data obtained from the Household Living Conditions Survey conducted in 2014. The results suggest that over two-thirds of the respondents identified all the items as necessary. Three highest levels of perceived necessity were housing, medical care, and clothing dimensions. Children faced high risks of deprivation and exclusion. The three highest levels of deprivation and exclusion were exhibited in the dimensions of environment, recreation, and education; the lowest two levels of deprivation and exclusion were exhibited in the dimensions of medical care and housing. The dimensions with higher levels of deprivation and exclusion exhibited higher relative contributions to facilitating poverty reduction. Moreover, evaluation of income and expenditure, family income, and family type were significantly related to the degree of perceived necessity and the levels of deprivation and exclusion. Those living in families with a large number of children exhibited a higher level of deprivation. Education of the caregivers was closely linked to social exclusion of children. This paper represents preliminary and small-scale research; however, several implications for methodology and policy can be derived from this study.

On testing the scale sensitivity of poverty measures

Past tests of the sensitivity of aggregate poverty measures to changes in equivalence scales can be very sensitive to the arbitrary choice of the pivotal reference demographics. It is recommended that future tests should use demographics typical of people living near the poverty line as their reference.

Intertemporal Poverty in Turkey

Poverty is generally considered as a static fact. Economics literature caters us several poverty indexes that measure aggregate poverty from cross-sectional data sets. These cross-sectional data sets and poverty indexes would not provide any information about the dynamic side of poverty. Some households/people might stay poor longer than others, some households/people might move to certain poverty line from the bottom part of income distribution while the others might stay at the bottom part of income distribution forever. Early poverty indexes are insensitive to these aspects of poverty. Taking into account these all, in this study, we have investigated about the intertemporal poverty in Turkey. We have used newly developed intertemporal poverty indexes and estimated the determinants of staying poor in Turkey by using panel data set Income and Living Conditions Survey for 2006-2009. In accordance with the final results, some economic policy recommendations are given to solve the poverty issue in Turkey.

Sectoral Decomposition of Changes in Pakistan’s Poverty: The New Interface

Propoor economic and regional policies focus on increasing the economic returns to the productive factors that the poor possesses. The objective of the study is to examine the impact of intrasectoral gains/losses and intersectoral shifts in population on aggregate changes in poverty in Pakistan. The result shows that the urban and rural sectors contributed to the increase in aggregate poverty, though the “interaction effect” and the “population shift effect” alleviated poverty, the overall impact was negligible.

Debt-Poor Kids

Child poverty in the United States has averaged around 20% since the late 1970s. During this time period, it has been consistently and considerably higher than poverty rates for other age groups. The case is often made that poverty in the United States is greatly underestimated. The many problems involved in measuring aggregate poverty rate also plague measures of child poverty. This article focuses on how interest payments on prior consumer debt affect government calculations of child poverty. After summarizing the negative consequences of child poverty, we use the Federal Reserve's Survey of Consumer Finances to estimate child poverty rates by subtracting interest payments on consumer debt from household income. The article concludes with some policy proposals for reducing child poverty and the number of households (especially those with children) who are “debt poor.”

Vulnerability to individual and aggregate poverty

We propose families of measures for vulnerability to both individual and aggregate poverty. We view vulnerability as the burden caused by the threat of poverty. Exposure to states of the world where hardship may strike causes distress ex-ante, even if ex-post the dice are benign and poverty (consumption below a critical norm) does not materialise. We ensure our measures meet a set of desirable axioms—in the case of aggregate vulnerability, this set includes sensitivity to the degree of correlation of outcomes across individuals. We argue that individual vulnerability levels are not enough to compose the aggregate picture, e.g. because society may be wary of the threat of simultaneous, widespread poverty. We illustrate with data from Ethiopia, where rainfall risks are found to raise vulnerability to poverty despite sustained increases in consumption.

Barack Obama's “Fight” to End Poverty: Rhetoric and Reality

ObjectivesIn this article we examine President Barack Obama's leadership on the issue of poverty. Our analysis seeks to address three specific objectives. First, we begin by examining the Obama administration's anti‐poverty efforts and their relationship with recent trends in the U.S. poverty rate. Second, we examine President Obama's rhetorical leadership on the issue of poverty, both in absolute terms and compared to other recent presidents. Compared to other recent presidents, how often has Obama talked about issues related to poverty and poor people? Third, we discuss the implications of our results for theories of presidential leadership.MethodsWe rely on a series of analyses of aggregate poverty trends, as well as content analyses of presidential weekly radio addresses.ResultsOur analyses find that contrary to the claims of critics, although the poverty rate has risen during President Obama's first term in office, recent increases in poverty have actually been somewhat lower that what would be expected given the state of the economy. The evidence indicates that one important reason for this is the implementation of ARRA. We find considerable support for claims that President Obama has demonstrated relatively little rhetorical leadership on the issue of poverty, although the frequency with which he has emphasized issues related to poverty is not significantly different compared to past presidents.ConclusionPresident Obama has had some objective success in his anti‐poverty efforts, but his leadership style on this issue can be characterized more as a “facilitator” rather than a “director” of change.

Poverty, Informality and the Optimal General Income Tax Policy

Abstract This paper investigates the optimal general income tax and audit policies when poverty is considered a public bad in an economy with two types of individuals whose income may not be observed. Our results depend on whether poverty is measured in absolute or in relative terms. For a relative poverty measure, it is possible to characterize conditions under which both rich and poor agents face either positive, negative or zero marginal tax rates. There is distortion at the top as long as the rich can influence the welfare of the whole society through a measure of poverty and a distortion might be optimum to reduce aggregate poverty. Those that declare to be rich can be audited randomly, similar to their counterpart poor ones. Lastly, honesty may be punished as well as rewarded. With an absolute poverty measure, we replicate the results in the optimum tax literature, i.e., "no distortion and no auditing at the top".

Costs, equity, efficiency and feasibility of identifying the poor in Ghana’s National Health Insurance Scheme: empirical analysis of various strategies

To analyse the costs and evaluate the equity, efficiency and feasibility of four strategies to identify poor households for premium exemptions in Ghana's National Health Insurance Scheme (NHIS): means testing (MT), proxy means testing (PMT), participatory wealth ranking (PWR) and geographic targeting (GT) in urban, rural and semi-urban settings in Ghana. We conducted the study in 145-147 households per setting with MT as our gold standard strategy. We estimated total costs that included costs of household surveys and cost of premiums paid to the poor, efficiency (cost per poor person identified), equity (number of true poor excluded) and the administrative feasibility of implementation. The cost of exempting one poor individual ranged from US$15.87 to US$95.44; exclusion of the poor ranged between 0% and 73%. MT was most efficient and equitable in rural and urban settings with low-poverty incidence; GT was efficient and equitable in the semi-urban setting with high-poverty incidence. PMT and PWR were less equitable and inefficient although feasible in some settings. We recommend MT as optimal strategy in low-poverty urban and rural settings and GT as optimal strategy in high-poverty semi-urban setting. The study is relevant to other social and developmental programmes that require identification and exemptions of the poor in low-income countries.

Measuring the effect of spell recurrence on poverty dynamics—evidence from Spain

Accounting for the time individuals spend below the poverty line is an important dimension in order to design social policies to fight against poverty. The literature is currently aiming to construct a consistent aggregate measure of poverty over time that takes into account individual income lifetime profiles. It is however, far from clear which aspects of the specific patterns of poverty spells should be included. Using longitudinal data for Spain, this paper shows that the effect of spell recurrence on poverty dynamics is relevant. Poverty exit and re-entry rates vary not only with personal or household characteristics but also with spell accumulation and the duration of current and past spells. In general, our main findings support that an aggregate intertemporal poverty index should incorporate full individual poverty lifetime trajectories accounting for both poverty and non-poverty spell durations.

Escaping Poverty: Patterns and Causes of Poverty Exits in Rural Bangladesh

This paper uses findings from 293 life-history interviews, conducted by the author and a small team of researchers in rural Bangladesh in 2007, to examine what can be learned about patterns of exit from poverty. The author argues that narrative-based studies of how individuals move out of, or into poverty can complement variable-based analyses of aggregate poverty trends. The analysis of poverty exits in this paper shows that individuals on trajectories of long-term improvement in well - being tend to more effectively exploit a limited set of work - oriented or asset-related opportunity types, and many of these can be identified from life-history interviews. The most important of these included, in order of frequency across the set of life histories: rural farm and non-farm-related businesses (some supported by loans); land asset accumulation, livestock production; remittances and support from sons’ and (to a lesser extent) daughters’ incomes; and crop production. Life histories also show that individuals enjoying long-term well-being improvement differed in key ways from people showing trajectories of long-term well-being decline. The paper explores these differences and discusses implications for both productive and protective poverty reduction policies.

Linking Growth, Employment and Poverty Changes in Cameroon

This study reviews the theoretical framework of sectoral decomposition and source decomposition. It isolates the sector-specific and the between-sector effects in accounting for aggregate poverty change in Cameroon using an exact decomposition and accounts for changes in household labour income in terms of labour market performances using a decomposition methodology proposed by Kakwani et al. (2006). During the period 1996-2001, poverty retreated significantly in Cameroon. It significantly contracted in the tertiary and secondary sectors, but the primary sector witnessed a considerable increase in the period under review. Analyses show that the decrease in poverty in the tertiary and secondary sectors is hugely accounted for by the within-sector effects, whereas the increase in poverty among households in the primary sector is largely accounted for by the between-sector effects. These results suggest the importance of ‘earnings mobility’ and ‘job mobility’ as effective strategies to come out of poverty. The massive influx of households into the primary sector from the secondary and tertiary sectors between 1996 and 2001 reflects the importance of the primary sector as a safety net in times of adversity.

Understandings and misunderstandings of multidimensional poverty measurement

Multidimensional measures provide an alternative lens through which poverty may be viewed and understood. In recent work we have attempted to offer a practical approach to identifying the poor and measuring aggregate poverty (Alkire and Foster, J Public Econ, 2011). As this is quite a departure from traditional unidimensional and multidimensional poverty measurement—particularly with respect to the identification step—further elaboration may be warranted. In this paper we elucidate the strengths, limitations, and misunderstandings of multidimensional poverty measurement in order to clarify the debate and catalyse further research. We begin with general definitions of unidimensional and multidimensional methodologies for measuring poverty. We provide an intuitive description of our measurement approach, including a ‘dual cutoff’ identification step that views poverty as the state of being multiply deprived, and an aggregation step based on the traditional FGT measures. We briefly discuss five characteristics of our methodology that are easily overlooked or mistaken and conclude with some brief remarks on the way forward.

Basic Pensions and Poverty Reduction in Sub-Saharan Africa

This paper explores the role of basic pensions in reducing poverty in sub-Saharan Africa. Using the most recent Senegalese household income-expenditure data survey, we set up scenarios of universal and means-tested basic pension schemes with different generosity levels. Simulations suggest that basic pension benefits have sizable impact on poverty decline among household, with elderly members, which translates into large decreases in aggregate poverty measures. The paper also analyzes the fiscal costs of basic pensions and shows that these are fiscally affordable as long as pension levels are reasonable. This suggests that basic pension programs could be financially sustainable in sub-Saharan African.

What are the distributional implications of halving poverty in South Africa when growth alone is not enough?

The United Nations Millennium Declaration commits to halving extreme poverty between 2000 and 2015. The South African government has set a goal of halving poverty by 2014, although the meaning of this goal has not yet been defined. This article frames government's stated target of halving poverty by 2014 in terms of specific measures of the poverty gap and poverty headcount ratio, using income and expenditure survey microdata. With the poverty line as defined here, approximately half the South African population falls below the poverty line. Despite this, the aggregate poverty gap is surprisingly small at about 3% of gross domestic product. Projections of poverty in 2014 under various growth scenarios indicate that growth alone will be insufficient to halve poverty by then, and that any worsening of distribution will put the target of halving poverty by 2014 far beyond reach. However, projections of the effects of a range of growth and distributional scenarios on poverty, using a new method for simulating pro-poor distributional change, indicate that halving poverty appears feasible with moderate growth rates and fairly mild pro-poor distributional change. The results are indicative as to the scale of distributional changes necessary to halve poverty under various growth scenarios.

Linking Employment and Poverty Changes between 1996 and 2001 in Cameroon

This paper studies the contributions of sector-specific and between-sector employment effects in accounting for aggregate poverty changes in Cameroon. We observed that the decrease in poverty among tertiary and secondary sector workers was considerably accounted for by the within-sector effects, whereas the increase in poverty among primary sector workers was largely attributable to the between-sector effects. The decrease in total household labour income in the poorest quintile is attributable to labour market participation rates and average days worked, but mitigated by household average daily earnings and employment rates.

Changes in Income Poverty Over the Post-Apartheid Period: An Analysis Based on Data From the 1993 Project for Statistics on Living Standards and Development and the 2008 Base Wave of the National Income Dynamics Study

This paper compares the level and distribution of income poverty in the 2008 National Income Dynamics Study (NIDS) to that measured in the 1993 Project for Statistics on Living Standards and Development (PSLSD). Attempts are made to make the income variables as comparable as possible across the two surveys. This requires that agricultural income and implied rental income from owner-occupied housing are excluded from the measure of income. The potential bias resulting from these exclusions is also discussed. The paper finds that aggregate poverty fell between 1993 and 2008 and that this result is robust for a wide range of poverty lines. The poverty profile has changed over time, however. Urban poverty has increased significantly, driven largely by increased migration from rural to urban areas. The share of poverty in households where the household head has incomplete secondary education has also increased markedly.

Who is poor in China? A comparison of alternative approaches to poverty assessment in Rural Yunnan

Despite widespread recognition of the multidimensionality of poverty among social scientists and policymakers, the monetary approach still dominates poverty assessment. However, it is possible that different poverty assessment methodologies identify dissimilar households as poor, leading to disparate policies for poverty reduction. This empirical research applies four approaches to poverty identification to the same population of rural households in Wuding County, Yunnan Province, PRC. These approaches include China's official poverty identification method, participatory poverty assessment (PPA), the monetary approach to poverty assessment, and use of multidimensional poverty indicators (MDI). This study discovered that these four approaches generate different aggregate poverty incidences, identifying different households with distinctly different characteristics as poor. Each approach evaluates different aspects and dimensions, highlighting some characteristics while concealing others. There is very little overlap among the poor households identified by each methodology. This has implications at the conceptual, methodological, and policy levels. The conceptual understanding of poverty should be broadened to include multidimensional and multidisciplinary socioeconomic indicators. Multiple approaches must be applied in order to avoid marginalising some aspects of poverty. Poverty reduction strategies should shift from promoting short-term income-generating activities to a broader combination of strategies that address the inter-linked structural causes of poverty.