Page 167 - Contributed Paper Session (CPS) - Volume 8

CPS2227 Jonathan Haughton

How will we know when we have achieved our
dream: a world free of poverty?
Jonathan Haughton
Suffolk University

Abstract
In this paper we examine the sensitivity of measures of poverty to the choices
made by analysts about “internal” decisions, mainly using survey data from
Rwanda, but with appropriate reference to the experience of other
countries. We focus on four (of the many possible) “internal” issues where the
assumptions made by the analyst may matter: valuing auto consumption,
adjusting for prices over time and space, specifying adult equivalents, and
establishing a poverty line. Of these, the most difficult is getting the prices
right. Unless there is some consistency, or code of best practice, in the
methods used, the results of analysts, even using the same underlying data,
will vary widely and may tell different stories.

Keywords
Poverty; Rwanda; adult equivalents; auto consumption

1. Introduction
Less than two decades ago the World Bank published a book by Sandra
Granzow (2000) entitled: Our Dream: A World Free of Poverty. This has now
been firmly established as the first and most prominent of the UN’s
Sustainable Development Goals, which is to “end poverty in all its forms
everywhere”, or more concretely, “by 2030, eradicate extreme poverty for all
people everywhere.”
The goal is noble but determining when it has been achieved will be
exceptionally difficult. This is because of the serious problems that arise in
measuring poverty. As recently as 2016, Angus Deaton wrote,
Among the most difficult and pressing problems with household surveys
is the quality of the data; in some cases, the problems are severe enough to
threaten even the most basic understanding of growth, poverty, and inequality
(Deaton 2016, p. 1223).
He notes that the problem is especially serious in Africa, where poverty is
widespread but household surveys “are often weak, often outdated, …
sometimes inconsistent over time within countries, have nonmatching
definitions … so that it is extremely difficult to assess progress over time, or to
make comparisons of poverty or inequality between countries” (Deaton 2016,
p.1224).

156 | I S I W S C 2 0 1 9