Household Surveys,Consumption, and the Measurement of Poverty

Household surveys are playing an increasingly important role in the measurement of poverty and well-being around the world. The Living Standards Measurement Study, which was begun in the World Bank under the guidance of Graham Pyatt in 1979, has played an important role in this movement. Its surveys are widely used within the Bank to measure consumption-based poverty, and survey data are now the exclusive basis for the global poverty counts. This paper discusses a number of unresolved issues in using consumption-based surveys for measuring well-being, including the choice of a money-metric versus welfare-ratio approach, the collection of suitable price information, the effects of measurement error on estimation, and methods for correcting per capita consumption for the demographic structure of the household.     

Food Aid Disincentives: the Tunisian Experience

An econometric model is used to assess the short‐term (impact), interim, and cumulative effects of food aid on the economy of Tunisia for the period 1960–92. Food aid displaced neither domestic production nor commercial imports of food grains. Rather, food aid provided incentives to promote growth through its income and policy effects. Food aid provided increased public revenue that enabled the government to take an active role in domestic pricing, preventing disincentive prices and promoting domestic production. The results indicate a positive role for food aid when disincentive effects are managed through public policies.     

Evaluating Consumer Preferences for Organic Food Production Standards

In 21st century agriculture, standards are increasingly used to define new food products, such as organic food and fair trade. In some cases these standards are privately determined but in other cases they have been established by governments. Indeed, the Government of Canada recently announced its organic food regulations. A key dimension of the policy process involves choosing which standards are to be used to govern the production of organic food. Unfortunately, decision makers faced with these choices know very little about how the public values the various standards that could be used to define organic. This study evaluates Canadian consumers' preferences for different organic standards. Standards pertaining to pesticide‐residue testing, product origin specifications, the standard setting agency, and standard monitoring agency are evaluated using a conjoint method. Key results suggest that consumers place a high value on a pesticide standard that involves regular testing of the end product and that they prefer an organic food standard to include a rule that limits where the good is produced. En agriculture en ce 21^e siècle, des normes sont de plus en plus utilisées pour définir de nouveaux produits alimentaires tels que les aliments biologiques et les aliments issus du commerce équitable. Dans certains cas, ces normes sont établies par des organismes privés, et dans d'autres cas, elles sont établies par les gouvernements. Dernièrement, le gouvernement du Canada a annoncé son Règlement sur les produits biologiques. Un élément clé du processus d'élaboration des politiques consiste à choisir les normes qui s'appliqueront à la production d'aliments biologiques. Malheureusement, les décideurs à qui reviennent ces choix en savent très peu sur les valeurs que le public accorde aux diverses normes qui pourraient être utilisées pour définir le terme «biologique». La présente étude évalue les préférences des consommateurs canadiens concernant les diverses normes sur les produits biologiques. Les normes sur l'analyse des résidus de pesticides, les spécifications sur l'origine du produit, les organismes de normalisation et les organismes de surveillance sont évaluées à l'aide d'une méthode conjointe. Les résultats fondamentaux montrent que les consommateurs accordent une grande importance à une norme sur les pesticides qui exige des analyses régulières du produit final et qu'ils préfèrent une norme sur les aliments biologiques qui inclut un règlement sur l'origine du produit.     

The financial crisis and the well-being of Americans

The Great Recession was associated with large changes in income, wealth, and unemployment, changes that affected many lives. Since January 2008, the Gallup Organization has been collecting daily data on 1,000 Americans each day, with a range of self-reported well-being (SWB) questions. I use these data to examine how the recession affected the emotional and evaluative lives of the population, as well as of subgroups within it. In the fall of 2008, around the time of the collapse of Lehman Brothers, and lasting into the spring of 2009, at the bottom of the stock market, Americans reported sharp declines in their life evaluation, sharp increases in worry and stress, and declines in positive affect. By the end of 2010, in spite of continuing high unemployment, these measures had largely recovered, though worry remained higher and life evaluation lower than in January 2008. The SWB measures do a much better job of monitoring short-run levels of anxiety as the crisis unfolded than they do of reflecting the evolution of the economy over a year or two. Even large macroeconomic shocks to income and unemployment can be expected to produce only small and hard to detect effects on SWB measures. SWB, particularly evaluation of life as a whole, is sensitive to question order effects. Asking political questions before the life evaluation question reduces reported life evaluation by an amount that dwarfs the effects of even the worst of the crisis; these order effects persist deep into the interview, and condition the reporting of hedonic experience and of satisfaction with standard of living. Methods for controlling these effects need to be developed and tested if national measures are to be comparable over space and time.     

Household Welfare and the Pricing of Cocoa and Coffee in Cote d'Ivoire: Lessons from the Living Standards Surveys

Cocoa and coffee are the most important crops in Côted'Ivoire. Until recently, the difference between world and administeredproducer prices provided an important source of government revenue.As a result of a continued decline of world prices of both crops,however, the Ivoirien government was forced to cut producerprices in half. Because 40 percent of Ivoirien households groweither cocoa or coffee, this cut can be expected to have a considerableimpact on the welfare level of these households. We use the1985 Living Standards Measurement Survey to estimate the welfareeffects of producer price changes for Ivoirien households, permittingan evaluation of the probable consequences of the recent pricecut. Using nonparametric econometric techniques, we find that,although many households will suffer losses of income, the cutswill not have adverse distributional effects: cocoa and coffeefarmers are scattered throughout the income distribution, butmost are concentrated in the middle.     

Counting the World's Poor: Problems and Possible Solutions

As recent discussions have made clear, the apparent lack ofpoverty reduction in the face of historically high rates ofeconomic growth—both in the world as a whole and in specificcountries (most notably India)—provides fuel for the argumentthat economic growth does little to reduce poverty. How confidentcan we be that the data actually support these inferences? Atthe international level, the regular revision of purchasingpower parity exchange rates plays havoc with the poverty estimates,changing them in ways that have little or nothing to do withthe actual experience of the poor. At the domestic level, theproblems in measuring poverty are important not only for theworld count but also for tracking income poverty within individualcountries. Yet, in many countries, there are large and growingdiscrepancies between the survey data—the source of povertycounts—and the national accounts—the source of themeasure of economic growth. Thus economic growth, as measured,has at best a weak relationship with poverty, as measured.      

Renters,landlords, and farmland stewardship

Are farmers better stewards of the land they own than the land they rent from others? We answer this question using a data set that identifies Ontario farmers’ conservation practices on their own land as well as the land they rent. Using a fixed‐effects regression approach, we find that the role of tenure varies for different types of conservation practices. Farmers were found to be just as likely to adopt a machinery‐related practice such as conservation tillage on their rented land as that land which they own. On the other hand, farmers were found to be less likely to adopt site‐specific conservation practices such as planting cover crops on rented land. However, this effect diminishes as the expected length of the rental relationship increases when the landlord has a farming background.     

Household Survey Data and Pricing Policies in Developing Countries

In recent years, household survey data from developing countrieshave increasingly become available and have been increasinglyused to cast light on important questions of policy. The reformof prices, whether agricultural prices, consumer taxes, subsidies,or tariffs, has consequences for individual welfare and forgovernment revenues, and these can be investigated empiricallywith household survey data. The gainers and losers from pricechanges can be identified, and the magnitudes of their gainsand losses measured. Nonparametric estimation techniques providea straightforward and convenient way of displaying this information.The procedure is illustrated for the effects of rice pricingin Thailand using data from more than five thousand rural households.Estimates of the revenue effects of price reforms are harderto obtain, because they require estimates of supply and demandelasticities, estimates that are not easily obtained for manydeveloping countries. A procedure is presented for estimatingprice elasticities of demand from spatial price variation asrecorded in household survey data. The main innovations liein the appropriate treatment of quality variations and measurementerror. Applications of the procedure in Côte d'lvoire,Indonesia, and Morocco are reviewed.     

Rational choice and the taxation of sin

The traditional literature on sumptuary taxation indicates that these taxes are the results of a majority of individuals imposing their moral code upon consumers of goods that are thought to be undesirable. Undoubtedly, this explanation is not trivial, and accounts for the existence of some of the present sumptuary taxes. This paper has developed a choice model of sumptuary taxes based on a wealth-maximization assumption that illustrates the possibility that an individual could approve of an excise tax on a good that he consumes.