Do We Know How Much Poverty There is?

44 Pages Posted: 21 Apr 2011

See all articles by Miguel Székely

Miguel Székely

Center for Education and Social Studies

Nora Lustig

Tulane University

Martin Cumpa

Inter-American Development Bank (IDB) - Research Department

José Antonio Mejía

Inter-American Development Bank (IDB) - Research Department

Date Written: December 2000

Abstract

This paper tests the sensitivity of poverty indexes to the choice of adult equivalence scales, assumptions about the existence of economies of scale in consumption, methods for treating missing and zero incomes, and different adjustments to handle income misreporting. We also perform sensitivity analysis to the use of different poverty lines and poverty indexes, which are issues that have been much more explored in the literature. The sensitivity analysis is applied to household survey data from 17 Latin American countries, which include 92% of the population in the region. By varying these parameters within reasonable boundaries, we find that the proportion of poor could be said to be either 12. 7 percent or 65. 8 percent of the total population. Additionally, the ranking of countries with respect to poverty is also highly sensitive. This points to the need of justifying and being explicit about the underlying choices and definitions behind poverty statistics, and to the need of performing sensitivity analysis illustrating the menu of options that can answer the question of how much poverty there is.

Suggested Citation

Székely, Miguel and Lustig, Nora Claudia and Cumpa, Martin and Mejía-Guerra, José Antonio, Do We Know How Much Poverty There is? (December 2000). IDB Working Paper No. 367, Available at SSRN: https://ssrn.com/abstract=1817236 or http://dx.doi.org/10.2139/ssrn.1817236

Miguel Székely (Contact Author)

Center for Education and Social Studies ( email )

Mexico City
Mexico

Nora Claudia Lustig

Tulane University ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

Martin Cumpa

Inter-American Development Bank (IDB) - Research Department ( email )

1300 New York Ave., NW
Washington, DC 20577
United States

José Antonio Mejía-Guerra

Inter-American Development Bank (IDB) - Research Department ( email )

1300 New York Ave., NW
Washington, DC 20577
United States

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