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Dynamic Poverty Decomposition Analysis: An Application to the Philippines

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  • Fujii, Tomoki
Abstract
In this paper, we propose a new method of poverty decomposition. Our method remedies the shortcomings of existing methods and has some desirable properties such as time-reversion consistency and subperiod additivity. Our decomposition integrates the existing methods of growth-redistribution decomposition and sector-based decomposition, because it allows us to decompose the change in poverty into growth and redistribution components for each group (e.g., regions or sectors) in the economy. Our decomposition works well in cases where only partial data are available for some periods. It is also flexible and can be extended to have the following six components: population shift, within-region redistribution, between-region redistribution, nominal growth, inflation, and methodological change components. The empirical application of the six-way decomposition to the Philippines for the period 1985–2009 shows that important policies for poverty reduction may differ across regions. For example, the Autonomous Region in Muslim Mindanao would need growth-enhancing policies, whereas Eastern Visayas would need policies to improve the income distribution. Our decomposition method has a wide applicability and may complement the poverty profile approach.

Suggested Citation

  • Fujii, Tomoki, 2017. "Dynamic Poverty Decomposition Analysis: An Application to the Philippines," World Development, Elsevier, vol. 100(C), pages 69-84.
    • Handle: RePEc:eee:wdevel:v:100:y:2017:i:c:p:69-84
    DOI: 10.1016/j.worlddev.2017.07.031
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    Cited by:

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    2. Fujii, Tomoki, 2017. "Dynamic Poverty Decomposition Analysis: An Application to the Philippines," World Development, Elsevier, vol. 100(C), pages 69-84.
    3. Zengzeng Fan & Wei Zou, 2023. "A Three-Component Decomposition of the Change in Relative Poverty: An Application to China," Land, MDPI, vol. 12(1), pages 1-15, January.
    4. Fujii Tomoki, 2015. "Poverty decomposition by regression," WIDER Working Paper Series 102, World Institute for Development Economic Research (UNU-WIDER).
    5. Priyabrata Sahoo & Debolina Biswas & Saswata Guha Thakurata, 2023. "Is Growth Pro-poor Among the States of India? A Poverty Decomposition Exercise During the 2000s," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(1), pages 107-133, January.
    6. Paul S. F. Yip & Jacky H. K. Wong & Billy Y. G. Li & Yi Zhang & Chi Leung Kwok & Meng Ni Chen, 2017. "Assessing the Impact of Population Dynamics on Poverty Measures: A Decomposition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 134(2), pages 531-545, November.
    7. Erumban, Abdul A. & de Vries, Gaaitzen J., 2024. "Structural change and poverty reduction in developing economies," World Development, Elsevier, vol. 181(C).
    8. Wei Zou & Xiaopei Cheng & Zengzeng Fan & Chuhao Lin, 2023. "Measuring and Decomposing Relative Poverty in China," Land, MDPI, vol. 12(2), pages 1-24, January.
    9. Tomoki Fujii, 2015. "Poverty decomposition by regression: An application to Tanzania," WIDER Working Paper Series wp-2015-102, World Institute for Development Economic Research (UNU-WIDER).
    10. Mitsuhiko Kataoka & Al-Ikram Taupan Darangina, 2023. "Imperial Manila syndrome in poverty reduction: a province-level spatial distribution analysis," Asia-Pacific Journal of Regional Science, Springer, vol. 7(1), pages 1-28, March.

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    More about this item

    Keywords

    poverty profile; inequality; growth; inflation; Philippines; Asia;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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