Question

Why is estimates of poverty in india are based on vertical comparitive analysis ?

Experts plz answer this question in 50 words

Answer 1

The Indian Planning Commission's state-wise poverty lines are widely used. Yet, until recently the underlying price adjustments were based on clearly outdated con-sumer price indices, and hence, we had reasons to expect the poverty measures to be biased. The new methodology, suggested by the Lakdawala Expert group, has greater credibility, but is still not uncontroversial. This paper adopts the Engel methodology first proposed by Hamilton (2001) to estimate new sets of consistent cost of living indices. Subsequently, new poverty estimates are provided. Our findings suggest that the official measures underreport poverty in North Eastern India, in states such as Assam, Bihar and West Bengal The Engel methodology also suggests larger state-wise price differences than implied by the official poverty lines.

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Answer 2

The Indian Planning Commission's state-wise poverty lines are widely used. Yet, until recently the underlying price adjustments were based on clearly outdated con-sumer price indices, and hence, we had reasons to expect the poverty measures to be biased. The new methodology, suggested by the Lakdawala Expert group, has greater credibility, but is still not uncontroversial. This paper adopts the Engel methodology first proposed by Hamilton (2001) to estimate new sets of consistent cost of living indices. Subsequently, new poverty estimates are provided. Our findings suggest that the official measures underreport poverty in North Eastern India, in states such as Assam, Bihar and West Bengal The Engel methodology also suggests larger state-wise price differences than implied by the official poverty lines.