Measuring the Pro-Poorness of Income Growth within an Elasticity Framework

32 Pages Posted: 20 Apr 2016

See all articles by B. Essama-Nssah

B. Essama-Nssah

World Bank

Peter J. Lambert

University of Oregon - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 1, 2006

Abstract

Poverty reduction has become a fundamental objective of development, and therefore a metric for assessing the effectiveness of various interventions. Economic growth can be a powerful instrument of income poverty reduction. This creates a need for meaningful ways of assessing the poverty impact of growth. This paper follows the elasticity approach to propose a measure of pro-poorness defined as a weighted average of the deviation of a growth pattern from the benchmark case. The measure can help assess pro-poorness both in terms of aggregate poverty measures, which are members of the additively separable class, and at percentiles. It also lends itself to a decomposition procedure, whereby the overall pattern of income growth can be unbundled, and the contributions of income components to overall pro-poorness identified. An application to data for Indonesia in the 1990s reveals that the amount of poverty reduction achieved over that period remains far below what would have been achieved under distributional neutrality. This conclusion is robust to the choice of a poverty measure among members of the additively separable class, and can be tracked back to changes in expenditure components.

Keywords: Pro-Poor Growth and Inequality, Population Policies, Services & Transfers to Poor, Inequality, Rural Poverty Reduction

Suggested Citation

Essama-Nssah, B. and Lambert, Peter J., Measuring the Pro-Poorness of Income Growth within an Elasticity Framework (October 1, 2006). World Bank Policy Research Working Paper No. 4035, Available at SSRN: https://ssrn.com/abstract=937530

B. Essama-Nssah (Contact Author)

World Bank ( email )

Washington, DC 20433
United States

Peter J. Lambert

University of Oregon - Department of Economics ( email )

Eugene, OR 97403
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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