Poverty and juggling
Published by Yazad Jal September 16th, 2004 in EconomicsSurjit Bhalla looks closely at some poverty figures and finds a few discrepancies.
The World Bank believes that poverty in India is 35 per cent; official government of India data suggest it is 24 per cent; and if these official data are corrected for definition differences and accurate price data, then poverty in 2000 is only 17.5 per cent, i.e. fully half the figure reported by the World Bank.
He’s also got a few strong words for NGO scare mongering on the poverty figures to get more funds.
Reminded me of a related piece by Swaminathan Aiyar that critiqued the calorie based calculations of the poverty line.
The National Sample Survey of 1999-00 put 26% of people below the poverty line, but only 3% said they were hungry some time in the year. Now we shouldn’t get complacent, since 3% in a country of one billion means 30 million people, a sizeable figure in absolute terms. But that is far, far lower than the 260 million who are below the poverty line.I do not think we need to revise the poverty line. What we do need to revise is the notion that our poverty line indicates insufficient food.
7 Responses to “Poverty and juggling”
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I’m generally suspicious of synthetic statistics like poverty figures. If you are attempting to assess economic progress, it is much easier to look at objectively measurable figures.
For example, here in the U.S., many politicians, using similar synthetic metrics, claim the poor have made no progress in the last thirty years, but if you look at any objective measure — the percentage of people without indoor plumbing went from 7% to 0.6%, for example — you find that massive progress has been made. For an example of the power of such statistics, see this article: http://techcentralstation.com/071504B.html
I would concentrate on figures like how many people have telephones, how many have indoor plumbing, how many electricity, etc. These numbers cannot be easily “gamed” the way that poverty “statistics” can be gamed. At worst, such statistics can be lied about, but they can’t be re-defined into meaninglessness, and people disbelieving the reported numbers can easily conduct independent surveys to assure they are accurate.
Tracking such statistics through time is the most important part. It is much more significant to say that the number of people with indoor plumbing rose from 8% to 15% than it is to merely note that it is 8% or 15%.
Unfortunately Peter, the state of data collection being what it is in India, all those statistics are hard to come by.
In fact, poverty in India is measured not by income, but by food consumption, which is what you’d want. But there too, the exercise seems to have got stuck in methodological issues.
Defining the poverty line is like asking people to interpret an ink blot pattern. Everybody comes up with varied definations.
Food consumption alone cannot be a criteria there has to be som kind of a standard based on standard of living/cost of living other wise the figures are just figures they make no difference to individuals.
BTW, statistics are pretty easy to come by. You just have to collect them independently instead of relying on the government.
A random sample of a few thousand people across India would be sufficient for extremely good statistical significance. Sampling theory very easily tells you how large a sample you need for any given level of confidence.
I’d say it is important that such statistics be gathered independently of the government anyway — otherwise, how do you know you can trust their figures? Government has a tremendous incentive to lie about economic statistics.
True, but in this case the question is whether poverty has declined in India over the past ten years or so. So you need data across time and I don’t think any private or even semi private organisation has been collecting data for so long in India. Besides it is tough to convince an NGO or a professional doomsayer using data collected by a private organisation.
There aren’t any easy answers.