Growth elasticity of monetary and non-monetary poverty

Working Paper 2016-403

Abstract

The sensitivity of the frequency of poverty to economic growth is one of the central issues of poverty and development discourse. In this paper we estimate the income growth elasticity of poverty and income inequality elasticity of poverty for a panel of 28 provinces of Iran from 1998 to 2009. We also, for the first time, estimate the growth elasticity of multidimensional poverty (estimated via Alkire-Foster method). The results demonstrated the low income growth elasticity of poverty while the income inequality elasticity of poverty is stronger and significant. Similar results are obtained for elasticities of multidimensional poverty. The results suggest that changes in inequality are more important for poverty reduction than in income growth.

Authors: Hosnieh Mahoozi.