CPI Bias and Its Implications for Poverty Reduction in Africa
International poverty estimates for countries in Africa commonly rely on national consumer price indexes to adjust trends in nominal consumption over time for changes in the cost of living. However, the consumer price index is subject to various types of measurement bias. This paper uses Engel curve estimations to assess bias in the consumer price index and its implications for estimated poverty trends. The results suggest that in 11 of 16 Sub-Saharan African countries in this study, poverty reduction may be understated because of consumer price index bias. With correction of consumer price index bias, poverty in these countries could fall between 0.8 and 5.7 percentage points per year faster than currently thought. For two countries, however, the paper finds the opposite trend. There is no statistically significant change in poverty patterns after adjusting for consumer price index bias for the other three countries.
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| Format: | Working Paper biblioteca |
| Language: | English en_US |
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World Bank, Washington, DC
2016-12
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| Subjects: | inflation, poverty reduction, Engel curve, CPI bias, economic model, price indices, cost of living, nominal consumption, |
| Online Access: | http://documents.worldbank.org/curated/en/284781481032358665/CPI-bias-and-its-implications-for-poverty-reduction-in-Africa https://hdl.handle.net/10986/25806 |
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dig-okr-10986258062024-08-09T09:22:07Z CPI Bias and Its Implications for Poverty Reduction in Africa Nguyen, Nga Thi Viet Dabalen, Andrew Gaddis, Isis inflation poverty reduction Engel curve CPI bias economic model price indices cost of living nominal consumption International poverty estimates for countries in Africa commonly rely on national consumer price indexes to adjust trends in nominal consumption over time for changes in the cost of living. However, the consumer price index is subject to various types of measurement bias. This paper uses Engel curve estimations to assess bias in the consumer price index and its implications for estimated poverty trends. The results suggest that in 11 of 16 Sub-Saharan African countries in this study, poverty reduction may be understated because of consumer price index bias. With correction of consumer price index bias, poverty in these countries could fall between 0.8 and 5.7 percentage points per year faster than currently thought. For two countries, however, the paper finds the opposite trend. There is no statistically significant change in poverty patterns after adjusting for consumer price index bias for the other three countries. 2017-01-04T21:45:10Z 2017-01-04T21:45:10Z 2016-12 Working Paper Document de travail Documento de trabajo http://documents.worldbank.org/curated/en/284781481032358665/CPI-bias-and-its-implications-for-poverty-reduction-in-Africa https://hdl.handle.net/10986/25806 English en_US Policy Research Working Paper;No. 7907 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank application/pdf text/plain World Bank, Washington, DC |
| institution |
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| country |
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| countrycode |
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| component |
Bibliográfico |
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| databasecode |
dig-okr |
| tag |
biblioteca |
| region |
America del Norte |
| libraryname |
Biblioteca del Banco Mundial |
| language |
English en_US |
| topic |
inflation poverty reduction Engel curve CPI bias economic model price indices cost of living nominal consumption inflation poverty reduction Engel curve CPI bias economic model price indices cost of living nominal consumption |
| spellingShingle |
inflation poverty reduction Engel curve CPI bias economic model price indices cost of living nominal consumption inflation poverty reduction Engel curve CPI bias economic model price indices cost of living nominal consumption Nguyen, Nga Thi Viet Dabalen, Andrew Gaddis, Isis CPI Bias and Its Implications for Poverty Reduction in Africa |
| description |
International poverty estimates for
countries in Africa commonly rely on national consumer price
indexes to adjust trends in nominal consumption over time
for changes in the cost of living. However, the consumer
price index is subject to various types of measurement bias.
This paper uses Engel curve estimations to assess bias in
the consumer price index and its implications for estimated
poverty trends. The results suggest that in 11 of 16
Sub-Saharan African countries in this study, poverty
reduction may be understated because of consumer price index
bias. With correction of consumer price index bias, poverty
in these countries could fall between 0.8 and 5.7 percentage
points per year faster than currently thought. For two
countries, however, the paper finds the opposite trend.
There is no statistically significant change in poverty
patterns after adjusting for consumer price index bias for
the other three countries. |
| format |
Working Paper |
| topic_facet |
inflation poverty reduction Engel curve CPI bias economic model price indices cost of living nominal consumption |
| author |
Nguyen, Nga Thi Viet Dabalen, Andrew Gaddis, Isis |
| author_facet |
Nguyen, Nga Thi Viet Dabalen, Andrew Gaddis, Isis |
| author_sort |
Nguyen, Nga Thi Viet |
| title |
CPI Bias and Its Implications for Poverty Reduction in Africa |
| title_short |
CPI Bias and Its Implications for Poverty Reduction in Africa |
| title_full |
CPI Bias and Its Implications for Poverty Reduction in Africa |
| title_fullStr |
CPI Bias and Its Implications for Poverty Reduction in Africa |
| title_full_unstemmed |
CPI Bias and Its Implications for Poverty Reduction in Africa |
| title_sort |
cpi bias and its implications for poverty reduction in africa |
| publisher |
World Bank, Washington, DC |
| publishDate |
2016-12 |
| url |
http://documents.worldbank.org/curated/en/284781481032358665/CPI-bias-and-its-implications-for-poverty-reduction-in-Africa https://hdl.handle.net/10986/25806 |
| work_keys_str_mv |
AT nguyenngathiviet cpibiasanditsimplicationsforpovertyreductioninafrica AT dabalenandrew cpibiasanditsimplicationsforpovertyreductioninafrica AT gaddisisis cpibiasanditsimplicationsforpovertyreductioninafrica |
| _version_ |
1807156410477182976 |