Robustness of Subjective Welfare Analysis in a Poor Developing Country: Madagascar 2001

Journal of Development Studies. 2006. No. vol. 42 №4. P. 559–591.

Lokshin M., Umapathi N., Paternostro S.

We analyse the subjective perceptions of poverty in Madagascar in 2001 and their relationship to objective poverty indicators. We base our analysis on survey responses to a series of subjective perception questions. We extend the existing empirical methodology for estimating subjective poverty lines on the basis of categorical consumption adequacy questions. Based on this methodology, we calculate the household-specific, subjective poverty lines. We are able to compare between the results of subjective poverty analysis using several types of subjective welfare questions. Our results show that the aggregate poverty measures derived from consumption adequacy questions accord quite well with the poverty measures based on objective poverty lines. We demonstrate that the subjective welfare analysis can be used in poor developing countries for evaluating socio-economic and distributional impacts of various policy interventions.

Keywords: consumption, poverty, public welfare, government policy