Thomas Pave Sohnesen, World Bank: "Using Reduced Consumption Aggregates to Track Poverty"

Frequent tracking of poverty is a challenge, as poverty measures often rely on complex and expensive consumption expenditure surveys. We investigate if reduced consumption aggregates, theoretically and empirically, can be used to track poverty between comprehensive consumption expenditure surveys. We show theoretically how reduced aggregates that are linear in total consumption for all prices can track all FTG poverty measures over time. Through simulations using real expenditure data, we show that such linear aggregates are observed in real data. We further show that relative few selected expenditure items can track poverty accurately over time, and that this approach seem like a viable strategy for tracking of poverty at reduced cost.

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