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household consumption

Alternative methods to produce poverty estimates when household consumption data are not available (Part I)

Hai-Anh H. Dang's picture

Poverty reduction consistently ranks among the most prioritized tasks of developing countries as well as the international community. Indeed, the Sustainable Development Goals (SDGs) recently adopted by the United Nations General Assembly call for eliminating poverty by 2030 in its very first goal. A good understanding about poverty trends and dynamics could result in more efficient policies and better use of resources. For example, social protection programs may be most suitable to prevent vulnerable households from falling into poverty, but are not the best options to fight a situation of entrenched chronic poverty.

Several questions typically come up in the context of poverty measurement. One set of questions concerns, unsurprisingly, how best to track the trends of poverty over time? Put differently, how do we know which trajectory country A’s poverty is on: is it upward, downward, or does it remain flat over time? The other set of questions are related to the composition of poverty transitions over time. In particular, what is the proportion of the poor in one period that remain poor (i.e., chronic poverty) or escape poverty (i.e., upward mobility) in the next period? Or what is the proportion of the non-poor that fall into poverty (i.e., downward mobility) in the next period?

Yet, finding the answers to these questions are challenging tasks, simply because comparable household consumption data for a specific country from multiple time periods are often unavailable, particularly for low-income countries. As an example, using the World Bank’s database, we plot in Figure 1 the number of data points of poverty estimates for a country against its consumption level. For better presentation, we also graph the fitted line for the regression of the former outcome on the latter outcome.

The estimated slope of this regression line is positive and strongly statistically significant, suggesting that a 10 percent increase in a country’s household consumption is associated with almost one-third (i.e., 0.3) more surveys. Figure 1 thus helps highlight the—perhaps paradoxical—fact that poorer countries with a stronger need for poverty reduction also face a more demanding challenge of poverty measurement given their smaller numbers of surveys. This is unsurprisingly consistent with a prevailing among some development practitioners that collecting survey data may not be the top priority for many developing countries.

Figure 1: Number of Household Surveys vs. Countries’ Income Level, 1981- 2014

Source: Dang, Jolliffe, and Carletto (in press).

Should I stay or should I go? Marriage markets and household consumption

Berk Ozler's picture

“We propose a model of the household with consumption, production and revealed preference conditions for stability on the marriage market. We define marital instability in terms of the consumption gains to remarrying another individual in the same marriage market, and to being single. We find that a 1 percentage point increase in the wife’s estimated consumption gains from remarriage is significantly associated with a 0.6 percentage point increase in divorce probability in the next three years.”

How much are Tanzanians paying for their food?

Waly Wane's picture

Let’s think together: Every Sunday the World Bank in Tanzania in collaboration with wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a few questions.

For many Tanzanians households, producing food for their family’s consumption remains their prime concern. About eight out of 10 Tanzanians are still involved in an agricultural activity, with only a marginal fraction of this production being commercialized. When Tanzanian households do something else, they generally earn just enough money to cover their food expenses. Other purchasing categories, such as housing and basic durable goods come a distant second, except for a few privileged households.



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