A Behavior-Based Approach to the Estimation of Poverty in India
Ingvild Almås, Anders Kjelsrud, & Rohini Somanathan
The Scandinavian Journal of Economics, Volume 121, Issue 1, January 2019.
Estimates of poverty in India are crucial inputs for the understanding of world poverty, yet there is much disagreement about the numbers and the legitimacy of methods used to derive them. In this paper, we propose and justify an alternative approach to identify the poor, which uses the proportion of income spent on food. Our estimates have weaker data requirements than official methods, and they compare favorably with several validation tests. Most notably, households around our state poverty lines obtain their calories from similar sources, whereas this is not true of official poverty lines. We also find that rates of self‐reported hunger are higher in states that we classify as poor.