CPI Bias and Its Implications for Poverty Reduction in Africa

Dabalen, Andrew ; Gaddis, Isis ; Nguyen, Nga Thi Viet

World Bank, Washington, DC

关键词: inflation;    poverty reduction;    Engel curve;    CPI bias;    economic model;   

DOI  :  10.1596/1813-9450-7907
RP-ID  :  WPS7907

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

International poverty estimates forcountries in Africa commonly rely on national consumer priceindexes to adjust trends in nominal consumption over timefor changes in the cost of living. However, the consumerprice index is subject to various types of measurement bias.This paper uses Engel curve estimations to assess bias inthe consumer price index and its implications for estimatedpoverty trends. The results suggest that in 11 of 16Sub-Saharan African countries in this study, povertyreduction may be understated because of consumer price indexbias. With correction of consumer price index bias, povertyin these countries could fall between 0.8 and 5.7 percentagepoints per year faster than currently thought. For twocountries, however, the paper finds the opposite trend.There is no statistically significant change in povertypatterns after adjusting for consumer price index bias forthe other three countries.