CPI Bias and Its Implications for Poverty Reduction in Africa

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 ty...

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Main Authors: Dabalen, Andrew, Gaddis, Isis, Nguyen, Nga Thi Viet
Format: Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2017
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
http://hdl.handle.net/10986/25806
id okr-10986-25806
recordtype oai_dc
spelling okr-10986-258062021-06-08T14:42:46Z CPI Bias and Its Implications for Poverty Reduction in Africa Dabalen, Andrew Gaddis, Isis Nguyen, Nga Thi Viet 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 http://documents.worldbank.org/curated/en/284781481032358665/CPI-bias-and-its-implications-for-poverty-reduction-in-Africa http://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 World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Sub-Saharan Africa
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic 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
Dabalen, Andrew
Gaddis, Isis
Nguyen, Nga Thi Viet
CPI Bias and Its Implications for Poverty Reduction in Africa
geographic_facet Africa
Sub-Saharan Africa
relation Policy Research Working Paper;No. 7907
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
author Dabalen, Andrew
Gaddis, Isis
Nguyen, Nga Thi Viet
author_facet Dabalen, Andrew
Gaddis, Isis
Nguyen, Nga Thi Viet
author_sort Dabalen, Andrew
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 2017
url http://documents.worldbank.org/curated/en/284781481032358665/CPI-bias-and-its-implications-for-poverty-reduction-in-Africa
http://hdl.handle.net/10986/25806
_version_ 1764460197006278656

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