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Reading between the Poverty Lines
The proposed Rangarajan method on measurement of poverty in India borrows elements from three earlier methods - those of Alagh, Lakdawala and Tendulkar. An important departure in the Rangarajan method is to compute the poverty line commodity basket by combining items from two fractile groups to address the relatively higher expenses for some essential non-food items. This, while being statistically plausible, poses a behavioural dilemma, as there will be no fractile group that will satisfy both. As an alternative, we suggest dual poverty lines where the fi rst is computed on the basis of average calorie, protein and fat requirements which are region- and state-specifi c and the second uses the combined median fractile group after adjusting the distribution with price differentials.
Comments and feedback from Sarthak Gaurav, T Krishna Kumar, V M Rao and M H Suryanarayana and from three members of the Expert Group, K L Datta, S Mahendra Dev and K Sundaram, on an earlier version were helpful. Usual disclaimers apply.
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