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Poverty lines in theory and practice by Martin Ravallion

By Martin Ravallion

A poverty line is helping concentration the eye of governments and civil society at the residing stipulations of the bad. This paper deals a severe review of other ways to surroundings poverty strains. In reviewing the equipment present in perform, the paper attempts to throw gentle on, and pass a way towards resolving, ongoing debates approximately poverty dimension, emphasizing these debates which might seem to have maximum pertaining to coverage discussions.

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The means used can be interpreted as ways of extending the informational base of conventional welfare measurements in applied economics. More information is sought to anchor the reference utility level. And more information is sought for making inter-personal comparisons of welfare when demand behavior alone is clearly insufficient. That information is sought in two main areas: (i) Objective information on requirements for attaining certain capabilities. There is a long tradition in poverty measurement of anchoring the poverty line to the attainment of certain basic capabilities, such as being able to lead a healthy and active life, including participating fully in the society around one.

The greater one's activity level. 21 That judgement also has implications for the non-food component of the poverty line. Good health is essential for most activities, and in most societies including the poorest being healthy requires spending on clothing, shelter and health care. Also, many activities one would readily deem essential to escaping poverty cannot be performed without participation in society; for example, this is true of employment, schooling, and health care, even in under-developed rural societies.

Helpful comments were also received from James Foster, Margaret Grosh, Peter Lanjouw, Dominique van de Walle, and participants at a workshop organized by the AERC in Kampala, Uganda, 1997. Page 1 Introduction A credible measure of poverty can be a powerful instrument for focusing the attention of policy makers on the living conditions of the poor. 1 Less attention has been given to the methods used in drawing the poverty line itself, which is often taken as given. Yet the choices made in setting poverty lines can matter greatly to the policy decisions which are to be guided by poverty data; indeed, they can matter just as much as the functional form issues.

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