Poverty Equivalent Growth Rate

13 Pages Posted: 12 Nov 2008

See all articles by Nanak Kakwani

Nanak Kakwani

University of New South Wales (UNSW)

Hyun H. Son

Asian Development Bank

Abstract

This paper proposes a new type of growth rate, called the poverty equivalent growth rate (PEGR), which takes into account both the growth rate in mean income and how the benefits of growth are distributed between the poor and the non-poor. The proposed measure satisfies a basic requirement that the proportional reduction in poverty is a monotonically increasing function of the PEGR. Thus, maximizing the PEGR implies a maximum reduction in poverty. The paper demonstrates that the magnitude of PEGR determines the pattern of growth: whether growth is pro-poor in relative or absolute sense or is poverty reducing pro-poor. The pattern of growth has been analyzed for Brazil using the National Household Survey (PNAD) covering the period 1995-2005.

Suggested Citation

Kakwani, Nanak and Son, Hyun H., Poverty Equivalent Growth Rate. Review of Income and Wealth, Vol. 54, Issue 4, pp. 643-655, December 2008. Available at SSRN: https://ssrn.com/abstract=1299953 or http://dx.doi.org/10.1111/j.1475-4991.2008.00293.x

Nanak Kakwani

University of New South Wales (UNSW)

Kensington
High St
Sydney, NSW 2052
Australia

Hyun H. Son

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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