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Discussion Paper

No. 2011-13 | May 26, 2011
On Various Ways of Measuring Pro-Poor Growth

Abstract

This paper examines three possible approaches to pro-poor growth. The first one assumes that the poverty line remains constant in real terms over time. The second perspective examines the case where the poverty line is equal to half the median of the income distribution but assumes that such a poverty line is determined exogenously. Finally the authors also propose a third type of decomposition of the change in poverty, one which is obtained when the poverty line is assumed to be endogenous.

In addition, whatever the assumption made concerning the poverty line, the authors take both a relative and an absolute approach to inequality measurement when defining pro-poor growth. With a relative approach to pro-poor growth it is assumed that inequality does not to vary when all incomes are multiplied by a constant whereas, with an absolute approach to pro-poor growth, inequality is supposed not to vary when an equal sum is added to all incomes. The empirical illustration covers the period 1990–2006 in Israel and the analysis is based on the use of the FGT poverty index. It turns out that the assumptions made concerning the way the poverty line is defined and the choice between a relative and an absolute approach to pro-poor growth greatly affect the results. As a whole however growth was pro-rich in Israel during the 1990–2006 period.

Paper submitted to the special issue
The Measurement of Inequality and Well-Being: New Perspectives 
 

JEL Classification

I32 O15

Cite As

Joseph Deutsch and Jacques Silber (2011). On Various Ways of Measuring Pro-Poor Growth. Economics Discussion Papers, No 2011-13, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2011-13

Assessment



Comments and Questions


Anonymous - Referee Report 1
May 26, 2011 - 14:06

See attached file


Anonymous - Referee Report 2
July 07, 2011 - 11:08

Report on “On Various Ways of Measuring Pro-Poor Growth”
Several methods for the task of analyzing whether growth has been pro-poor have been proposed in the existing literature. This paper applies some of them to the case of Israel.
The results are interesting but the paper is not well ...[more]

... written. Its format is more that of a report than of a paper to be published in a journal. There are too many sub-sections, sub-points, tables, the appendix is 22 pages long.
I recommend that the paper be rewritten mainly by focusing on its novel aspect, which is the application to Israel. The ‘quick’ survey after the introduction is too condensed and can be understood only by a knowledgeable reader who does not need it at all. I propose to delete it and to briefly explain the concepts when needed during the application. It does not help the flow of the paper that the authors analyze the case of three poverty lines and the relative vs the absolute approach to pro-poor growth. Why do we need three poverty lines? It is well known that when measuring poverty all the results rely heavily on the chosen poverty line. Can the authors motivate the appropriateness of this choice?
The references are not consistently written: the issue number is not always included; the name of the journal is not always in italics; “Vol.” and “pp.” do not appear throughout; various different fonts are employed.