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21. Reckoning Inter-group Poverty Differentials in the Measurement of Aggregate Poverty

Author:
S. Subramanian
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In a heterogeneous population which can be partitioned into well-defined subgroups, it is plausible that the extent of measured aggregate poverty should depend upon the distribution of poverty across the subgroups. A judgment in favour of an equal inter-group distribution of poverty could arise in two ways. In the first approach, equality is upheld as an intrinsic social virtue, and the aggregate measure of poverty, in line with this view, is 'adjusted' to reflect the extent of inter-group disparity in the distribution of poverty that obtains. In the present paper, this approach is examined, with specific reference to the advancement of a diagrammatic aid to analysis called the group poverty profile. In the second approach, equality is upheld for instrumental reasons which arise from the observed fact that any individual's level of deprivation is a function not only of one's own income, but of the general level of prosperity of the group to which one is affiliated. Individual deprivation functions are specialized to a form which reflects this 'group-affiliation' externality, and the resulting poverty measure is studied with respect to its properties, and its implications for inter-group equity. The analysis is briefly extended to a review of the measurement of literacy, along externality-motivated lines suggested elsewhere by Basu and Foster. The paper concludes that social realism in the measurement of deprivation is often compromised by mainstream approaches to economic theorizing in which both heterogeniety and group-related externalities are generally de-emphasized.
Topic:
Demographics, Economics, Human Welfare, and Poverty

22. Why Do Poverty Rates Differ From Region to Region? The Case of Urban China

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper proposes a semi-parametric method for poverty decomposition, which combines the data-generating procedure of Shorrocks and Wan (2004) with the Shapley value framework of Shorrocks (1999). Compared with the popular method of Datt and Ravallion (1992), our method is more robust to misspecification errors, does not require the predetermination of functional forms, provides better fit to the underlying Lorenz curve and incorporates the residual term in a rigorous way. The method is applied to decomposing variations of urban poverty across the Chinese provinces into three components – contributions by the differences in average nominal income, inequality and poverty line. The results foreground average income as the key determinant of poverty incidence, but also attach importance to the influence of distribution. The regional pattern of the decomposition suggests provincial groupings based not entirely on geographical locations.
Topic:
Demographics, Economics, and Poverty
Political Geography:
China and Asia

23. Rising Spatial Disparities and Development

Author:
Ravi Kanbur and Anthony J. Venables
Publication Date:
09-2005
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Amidst a growing concern about increasing inequality, the spatial dimensions of inequality have begun to attract considerable policy interest. In China, Russia, India, Mexico, and South Africa, as well as most other developing and transition economies, there is a sense that spatial and regional disparities in economic activity, incomes and social indicators, are on the increase. Spatial inequality is a dimension of overall inequality, but it has added significance when spatial and regional divisions align with political and ethnic tensions to undermine social and political stability. Also important in the policy debate is a perceived sense that increasing internal spatial inequality is related to greater openness of economies, and to globalization in general.
Topic:
International Relations, Foreign Policy, Demographics, and Development
Political Geography:
Russia, China, India, South Africa, and Mexico

24. Income Risk and Welfare Status of Rural Households in Nigeria: Ekiti State as a Test Case

Author:
B. Oluwatayo
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of income risk on the level of well-being of rural households in Nigeria. While income risk is defined as the risks associated with variability in income well-being is defined in terms of the level of utility reached by a given individual. This level is a function of goods and services that the individual consumes. The study is based on primary data collected from a sample of 285 households in Ekiti State, Nigeria. Analysis of the data revealed that household heads' age, years of formal education, household size, size of land cultivated and total expenditure (on food and non-food items) are major determinants of income risks among households in the study area. Also, going by the indices of various social indicators of well-being considered, it was revealed that income risk impacts negatively on the well-being of households in the study area.
Topic:
Demographics, Economics, and Human Welfare
Political Geography:
Africa and Nigeria

25. China's Business Cycles: Perspectives from an AD–AS Model

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper represents a first attempt to study China's business cycles using a formal analytical framework, namely, a structural VAR model. It is found that: (a) demand shocks were the dominant source of macroeconomic fluctuations, but supply shocks had gained more importance over time; (b) the driving forces of demand shocks were consumption and fixed investment in the first cycle of 1985–90, but shifted to fixed investment and world demand in the second cycle of 1991–96 and the post-1997 deflation period; and (c) macroeconomic policies did not play an important part either in initiating or counteracting cyclical fluctuations.
Topic:
Demographics, Economics, and Emerging Markets
Political Geography:
China

26. Decomposing Spatial Differences in Poverty in India

Author:
Shatakshee Dhongde
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Over the last decade, India has been one of the fastest growing economies, and has experienced considerable decline in overall income poverty. However, in a vast country like India, poverty levels vary significantly across the different states. In this paper, we analyze the differences between poverty at the state and national level, separately for the rural and urban sector, in the year 1999-2000. Instead of following the usual practice of decomposing the changes in poverty over time, we decompose the changes in poverty across regions. Such decomposition reveals that differences in state and national poverty levels were largely explained by differences in the state and national mean income levels. Differences in the state and national distributions of income were less important in explaining spatial differences in poverty. An important policy implication of our results is that states with extremely high levels of poverty would have reduced poverty significantly by raising their mean income levels to the national mean income, instead of changing their distribution of income to match the national income distribution.
Topic:
Demographics, Economics, and Poverty
Political Geography:
India and Asia

27. Divergent Means and Convergent Inequality of Incomes among the Provinces and Cities of Urban China

Author:
John Knight, Li Shi, and Zhao Renwei
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Two precisely comparable national household surveys relating to 1988 and 1995 are used to analyse changes in the inequality of income in urban China. Over those seven years province mean income per capita grew rapidly but diverged across provinces, whereas intra-province income inequality grew rapidly but converged across provinces. The reasons for these trends are explored by means of various forms of decomposition analysis. Comparisons are also made between the coastal provinces and the inland provinces. The decompositions show the central role of wages, and within wages profitrelated bonuses, together with the immobility of labour across provinces, in explaining mean income divergence. The timing of economic reforms helps to explain the convergence of intra-province income inequality. Policy conclusions are drawn.
Topic:
Demographics, Development, and Economics
Political Geography:
China and Asia

28. Income Inequality in Rural China: Regression-based Decomposition Using Household Data

Author:
Guanghua Wan and Zhangyue Zhou
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
A considerable literature exists on the measurement of income inequality in China and its increasing trend. Much less is known, however, about the driving forces of this trend and their quantitative contributions. Conventional decompositions, by factor components or by population subgroups, only provide limited information on the determinants of income inequality. This paper represents an early attempt to apply the regression-based decomposition framework to the study of inequality accounting in rural China, using household level data. It is found that geography has been the dominant factor but is becoming less important in explaining total inequality. Capital input emerges as a most significant determinant of income inequality. Farming structure is more important than labour and other inputs in contributing to income inequality across households.
Topic:
Demographics, Development, and Economics
Political Geography:
China and Asia

29. Economic Well-being and Non-economic Well-being: A Review of the Meaning and Measurement of Poverty

Author:
Andrew Sumner
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper discusses the measurement of poverty and well-being. A historical overview is given of the last fifty years. This is followed by discussion of three groupings of indicators: those measures based primarily on economic well-being; those based on non-economic well-being and composite indicators. It is argued that the choice of indicator should reflect its purpose and that economic measures are best when quick, rough-and-ready, short run, aggregate inferences are required. In contrast, non-economic measures are better when greater depth on medium- or longer-term trends and/or dis-aggregation are required.
Topic:
Demographics, Economics, Human Welfare, and Poverty

30. Income-based Measures of Average Well-being

Author:
Steve Dowrick
Publication Date:
03-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Internation comparisons of average national incomes omit important information about leisure, home production, health, etc. They are also bedevilled by index number problems. This paper suggests ways of combining working hours and life-expectancy with income comparisons, and shows that the fixed-price indexes of real income, such as those in the Penn World Table, substantially understate the income gaps between the poorest and richest countries.
Topic:
Demographics, Economics, Human Welfare, and Poverty