Deaton s analysis of the problems withpoverty counts and suggestions for improvement, includingissues needing further research, are based on two distinctstages in counting the poor. At the first or internationalstage, a world poverty line is set and used to derivecomparable poverty lines for each country. At the second ordomestic stage, the poverty lines are used to count thenumber of poor people in each country, and the others areadded up over countries. He finds disquieting evidence aboutboth stages of counting. The data for poverty counts in thesecond stage come from household surveys, whereas data onaggregate economic growth are from National AccountsStatistics (NAS). Deaton finds that in many countries thereare large and growing disparities between survey data andnational accounts so that there is no consistent empiricalbasis for conclusions about the extent to which growthreduces poverty. It is scandalous that even after nearlyhalf a century of pursuing national and internationalprograms for the eradication of mass poverty, the empiricalfoundations for assessing the success or failure of theprograms and drawing lessons from them are so weak as to bedeemed nonexistent. Abandoning them and focusing on nationaland subnational poverty analysis that goes beyond headcountswill be the sensible course to follow. The author focusesonly on consumption-based poverty lines. The reason is thechallenge of defining household income in a theoreticallysatisfactory manner and collecting data on income based onthat definition through household surveys in any country(developed or developing). Deaton (1989) discusses thedifficulties in meeting the challenge. Poverty counts basedon income-based poverty lines are even more problematic thanconsumption-based ones.
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