The pace of poverty reduction - A fractional response approach
Bluhm, Richard, De Crombrugghe, Denis and Szirmai, Adam (2013). The pace of poverty reduction - A fractional response approach. UNU-MERIT.
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Author Bluhm, Richard
De Crombrugghe, Denis
Szirmai, AdamTitle The pace of poverty reduction - A fractional response approach Publication Date 2013 Place of Publication Maastricht Publisher UNU-MERIT Pages 41 Abstract The pace of poverty reduction through growth vs. redistribution is at the heart of current debates on equitable development. In this paper, we argue that empirical poverty decompositions should build in the inherent boundedness of the poverty headcount ratio directly. As a solution, we propose a fractional response approach to estimating poverty decompositions, and present extensions dealing with unobserved heterogeneity, measurement error and unbalancedness. Using a large new data set, we estimate income and inequality (semi-)elasticities of poverty for the 2$ a day and 1.25$ a day poverty lines. The models fit the data remarkably well over the entire data range. We highlight the relevance of focusing on semi-elasticities for policy purposes and, building on the improved accuracy of the fractional response results, we present poverty projections from 2010 through 2030. Finally, we discuss some implications of these results for the post-2015 development agenda. UNU Topics of Focus Poverty Keyword Poverty
Inequality
Fractional response models
Income growthJEL I32
C25
O10
O15Copyright Holder UNU-MERIT Copyright Year 2013 Copyright type Creative commons -
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