Price Changes and Some Underlying Aspects of Measurement of Poverty |
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Authors: | Panda Manoj K. Rath Kali P. |
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Affiliation: | 12.Indira Gandhi Institute of Development Research, Gen. A. K. Vaidya Marg, Mumbai, 400 065, India ;22.Economic Growth Center, Yale University, New Haven, CT, 06520, USA ;32.Department of Economics and Econometrics, University of Notre Dame, Notre Dame, IN, 46556, USA ; |
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Abstract: | The paper deals with effects of price changes on measurement of poverty. It is shown that there are situations, when prices and nominal incomes change, a higher nutritional intake or an increase in commodity consumption of the poor can be associated with higher poverty gaps and a higher poverty index of the society. A positive relationship of this kind is quite counter-intuitive in the context of poverty measurement. This is caused by the adjustment of the poverty line and/or incomes of one situation by the prices of the other for the purpose of comparison. |
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