Growth Elasticities of Poverty Reduction
DOI:
https://doi.org/10.25071/1874-6322.40545Keywords:
Poverty measures, growth, inequality, poverty linesAbstract
Thirty years ago, Nanak Kakwani provided elegant nonparametric formulae
for the point elasticities of poverty measures with respect to changes in
the mean of the distribution, thus analytically linking those measures to
key macroeconomic aggregates. Numerous insights are found in Kakwani’s
elasticities. Rising inequality, measurement errors, discrepancies between
surveys and national accounts, and changing ideas about what ‘poverty’
means are all reasons why the impacts of growth on poverty observed in
practice can be substantially lower than suggested by Kakwani’s elasticities.
These elasticities should not be treated as structural parameters. Rather,
they can vary over time and place in systematic ways.
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