Podcast
Questions and Answers
Why is it not legitimate to compute simple averages to make inferences about the whole population?
Why is it not legitimate to compute simple averages to make inferences about the whole population?
- Because simple averages ignore the total population size.
- Because simple averages do not account for regional differences in income. (correct)
- Because simple averages can only be computed for the entire country.
- Because simple averages are always biased and inaccurate.
Which region had the highest true income per capita?
Which region had the highest true income per capita?
- Region A
- Both regions A and B had the same income.
- The whole country
- Region B (correct)
How many households were surveyed in Region A?
How many households were surveyed in Region A?
- 2,000
- 5,000
- 1,600
- 400 (correct)
What is the best available estimator of per capita income in the population?
What is the best available estimator of per capita income in the population?
What was the average per capita income based on the survey data?
What was the average per capita income based on the survey data?
How many total people are represented by each household surveyed in Region A?
How many total people are represented by each household surveyed in Region A?
What sampling method was used in the Vietnam Living Standards Survey of 1992-93?
What sampling method was used in the Vietnam Living Standards Survey of 1992-93?
What is a key advantage of the survey method used in the Vietnam Living Standards Survey?
What is a key advantage of the survey method used in the Vietnam Living Standards Survey?
What is the first step in measuring poverty?
What is the first step in measuring poverty?
Which of the following is NOT a strength of using survey data in poverty analysis?
Which of the following is NOT a strength of using survey data in poverty analysis?
What type of sampling is emphasized in the context of survey design issues?
What type of sampling is emphasized in the context of survey design issues?
Why is weighting important in surveys using stratified random sampling?
Why is weighting important in surveys using stratified random sampling?
Which of the following is considered a measure of household welfare besides income and consumption?
Which of the following is considered a measure of household welfare besides income and consumption?
Which problem is commonly associated with measuring income and consumption?
Which problem is commonly associated with measuring income and consumption?
What does establishing a minimum acceptable standard of an indicator involve?
What does establishing a minimum acceptable standard of an indicator involve?
What is a common argument regarding the measurement of welfare?
What is a common argument regarding the measurement of welfare?
What type of data collection involves resurveying the same subjects multiple times?
What type of data collection involves resurveying the same subjects multiple times?
What is the principal indicator of living standards collected in most surveys?
What is the principal indicator of living standards collected in most surveys?
Why do some surveys choose to gather data on either income or expenditure?
Why do some surveys choose to gather data on either income or expenditure?
What effect does a complex questionnaire have on survey data collection?
What effect does a complex questionnaire have on survey data collection?
Which of the following surveys is an example of a longitudinal survey?
Which of the following surveys is an example of a longitudinal survey?
How does a smaller sample size affect survey results?
How does a smaller sample size affect survey results?
Which of the following constraints often affects the design and implementation of surveys?
Which of the following constraints often affects the design and implementation of surveys?
What is a potential outcome of limited disaggregation in survey results?
What is a potential outcome of limited disaggregation in survey results?
What is the main goal of the World Bank as expressed in their mission statement?
What is the main goal of the World Bank as expressed in their mission statement?
Which aspect of poverty measurement is highlighted as a challenge in the content?
Which aspect of poverty measurement is highlighted as a challenge in the content?
What does the acronym PRSP stand for in the context of the World Bank's efforts?
What does the acronym PRSP stand for in the context of the World Bank's efforts?
Why does the World Bank emphasize a country-driven approach to the PRSP process?
Why does the World Bank emphasize a country-driven approach to the PRSP process?
What initial step does the PRSP process usually start with?
What initial step does the PRSP process usually start with?
What is identified as necessary for evaluating the effectiveness of poverty reduction strategies?
What is identified as necessary for evaluating the effectiveness of poverty reduction strategies?
What major theme is emphasized in the Handbook mentioned in the content?
What major theme is emphasized in the Handbook mentioned in the content?
What is a qualitative measure of poverty concerned with?
What is a qualitative measure of poverty concerned with?
What is a limitation of using household expenditure or income as a proxy for utility?
What is a limitation of using household expenditure or income as a proxy for utility?
Which approach focuses primarily on per capita consumption expenditure or income?
Which approach focuses primarily on per capita consumption expenditure or income?
What might be considered nonwelfarist indicators of individual welfare?
What might be considered nonwelfarist indicators of individual welfare?
How do nonwelfarist measures contribute to understanding poverty?
How do nonwelfarist measures contribute to understanding poverty?
What is a potential philosophical issue with interpreting nonwelfarist measures?
What is a potential philosophical issue with interpreting nonwelfarist measures?
If households have adequate income for basic needs, what concern might arise?
If households have adequate income for basic needs, what concern might arise?
In what way does the paternalistic approach differ from the welfarist approach?
In what way does the paternalistic approach differ from the welfarist approach?
Which of the following measures reflects outputs rather than inputs into the generation of utility?
Which of the following measures reflects outputs rather than inputs into the generation of utility?
What is a primary issue with Haig and Simons' definition of income?
What is a primary issue with Haig and Simons' definition of income?
Why might income measurement be particularly challenging for farmers?
Why might income measurement be particularly challenging for farmers?
In measuring income, what aspect of self-employment poses a challenge?
In measuring income, what aspect of self-employment poses a challenge?
Which of the following is a potential result of focusing solely on cash income?
Which of the following is a potential result of focusing solely on cash income?
What was a limitation of the Vietnam Living Standards Surveys mentioned?
What was a limitation of the Vietnam Living Standards Surveys mentioned?
What challenge does the concept of 'quintiles' present for assessing income?
What challenge does the concept of 'quintiles' present for assessing income?
What is a significant drawback of measuring income over an extended period?
What is a significant drawback of measuring income over an extended period?
Which of the following best describes the income situation of many students?
Which of the following best describes the income situation of many students?
Flashcards
Poverty Comparisons
Poverty Comparisons
The act of comparing poverty levels over time or across different groups, focusing on both whether poverty has decreased (qualitative) and by how much (quantitative).
Poverty Reduction Strategy Paper (PRSP)
Poverty Reduction Strategy Paper (PRSP)
A detailed plan outlining a country's long-term strategy to reduce poverty, based on data and analysis, and guided by the World Bank.
Measuring Poverty
Measuring Poverty
The process of measuring poverty involves collecting and analyzing data to understand the extent and characteristics of poverty in a country.
Analyzing Poverty
Analyzing Poverty
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Local Ownership of PRSP
Local Ownership of PRSP
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World Bank's Role in PRSP
World Bank's Role in PRSP
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Improving the Position of Poor People
Improving the Position of Poor People
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Systematic Thinking for Poverty Reduction
Systematic Thinking for Poverty Reduction
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Measuring Poverty Steps
Measuring Poverty Steps
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Welfare Indicator
Welfare Indicator
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Poverty Line
Poverty Line
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Summary Statistic
Summary Statistic
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Survey Data in Poverty Analysis
Survey Data in Poverty Analysis
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Sampling in Poverty Analysis
Sampling in Poverty Analysis
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Equivalence Scales
Equivalence Scales
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Consumption as Welfare
Consumption as Welfare
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Longitudinal Surveys
Longitudinal Surveys
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Panel Data Sets
Panel Data Sets
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Living Standard Indicators
Living Standard Indicators
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Income vs. Expenditure
Income vs. Expenditure
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Questionnaire Complexity Impact
Questionnaire Complexity Impact
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Budget Constraints Impact
Budget Constraints Impact
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Sample Size and Disaggregation
Sample Size and Disaggregation
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Trade-offs in Research
Trade-offs in Research
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Per Capita Income
Per Capita Income
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Sampling
Sampling
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Stratified Sample
Stratified Sample
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Weights
Weights
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Household Survey
Household Survey
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Consumption
Consumption
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Statistical Inference
Statistical Inference
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Household Welfare Assumption
Household Welfare Assumption
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Per Capita Consumption Expenditure
Per Capita Consumption Expenditure
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Non-Monetary Contributions to Welfare
Non-Monetary Contributions to Welfare
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Non-Welfarist Approach
Non-Welfarist Approach
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Output Measures of Welfare
Output Measures of Welfare
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Multidimensional Poverty
Multidimensional Poverty
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Resource Adequacy vs. Choice
Resource Adequacy vs. Choice
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Welfarist Approach
Welfarist Approach
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Haig-Simons Income
Haig-Simons Income
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Time Period for Income Measurement
Time Period for Income Measurement
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Challenges in Measuring Income
Challenges in Measuring Income
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Income Understatement in Developing Countries
Income Understatement in Developing Countries
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Income Quintile
Income Quintile
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Capital Gains
Capital Gains
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Impact of Income Measurement on Poverty Analysis
Impact of Income Measurement on Poverty Analysis
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Study Notes
Poverty Measurement
- Poverty is "pronounced deprivation in well-being."
- The conventional view links well-being to command over commodities.
- Poverty can be measured in monetary terms (e.g., income, consumption) or through specific consumption types (e.g., house poor, food poor, health poor).
- Other dimensions of poverty include malnutrition and literacy.
- The broadest approach focuses on capabilities to function in society (e.g., income, education, health, powerlessness, lack of political freedoms).
- Four reasons to measure poverty:
- To keep poor people on the agenda
- To identify people in need of interventions
- To monitor policy interventions
- To evaluate the effectiveness of institutions designed to support poor people
- The Poverty Reduction Strategy Paper (PRSP) process is a framework to help countries systematically address poverty by measuring, analyzing, and addressing issues.
Learning Objectives
- Define poverty.
- Summarize the three main views of poverty
- State four justifications for measuring poverty.
- Outline the Poverty Reduction Strategy Paper process.
- Explain the need for technical and analytical training in poverty analysis.
Measurement of Poverty
- Measuring poverty requires significant effort, energy, and resources as it requires gathering survey data directly from households.
- Four good reasons to measure poverty:
- To keep the subject of poverty on the agenda.
- To accurately identify the poor and target interventions.
- To monitor and evaluate the performance of programs designed to reduce poverty.
- To evaluate and improve the performance of institutions involved in fighting poverty.
- The PRSP process, a World Bank initiative, guides countries toward poverty reduction.
Survey Issues
- Survey samples can be national or more narrowly defined (e.g., a specific region or group).
- The survey unit of analysis is normally the household or individuals.
- Longitudinal surveys (using panel data sets) of the same people over time are more complex but provide more in-depth analysis and important time-series data.
- Household behaviors should be collected to understand actual welfare.
- Collect consumption expenditure or income information.
- Survey design should be carefully planned to avoid issues like biases in survey design, sample frame issues, and response bias and avoid misleading data.
- Weighting is essential to get reliable statistics from the survey.
Goods Coverage and Valuation
- Income is generally used as a welfare measure, but it often understates actual welfare, especially in developing countries.
- More comprehensive information on consumption can help estimate real welfare by accounting for items not commonly included in income data, such as home-produced goods and services, changes in asset value and cost of housing.
- The main issue is that there’s no universally agreed methodology
- Income estimates of individuals might include wages, salaries, household remittances, farm profits, and other incomes generated from various sources.
- Consumption, a broadly-defined measure of welfare, includes both purchased goods & services, and goods and services from household production.
- It's crucial to account for differences in income and needs as these can impact consumption and well-being.
- Consumption data tend to be more reliable because people can remember better their consumption patterns than their income.
Variability of Measurement
- Income and consumption can fluctuate month-to-month and year-to-year.
- Consumption is more stable and more reliable in terms of measuring permanent income due to regular consumption patterns.
- Short-term income fluctuations are averaged out in consumption
- Analysts prefer consumption data over income data in developing countries because it’s more closely tied to everyday resources.
- Household consumption patterns can be affected by factors such as savings, remittances, risk-sharing arrangements, and access to public resources.
Variability of Measurement & Time Period
- Income fluctuates more significantly than consumption.
- Consumption tends to be more stable overall.
- Households employ strategies to reduce monthly variations, such as saving, or sharing risks with others
- Current consumption is preferred to current income in developing countries because consumption tends to reflect current available resources to the household and not be as influenced by short-term variations.
Measuring Durable Goods
- Durable goods (goods that last more than one year) are often excluded from survey data.
- Measuring the value of durable goods in a household’s consumption is difficult because it is hard to quantify the service they provide across their lifetime.
- To calculate their value, the price change in each good is calculated and the interest rate required to retain the asset must be accounted for.
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