Articles by Angus Deaton

Utsa Patnaik's critique ("A Critical Look at Some Propositions on Consumption and Poverty", 6 February 2010) of the authors' earlier paper on food and nutrition ("Food and Nutrition in India: Facts and Interpretations", 14 February 2009) does not stand up to scrutiny. She claims that the observed decline in calorie intake at given levels of real per capita expenditure is an illusion due to faulty price indexes, but does not offer any evidence that the consumer price index actually underestimates cost of living increases. Patnaik's "alternative deflator" and "direct poverty lines" are devoid of any convincing rationale. The charge of miscalculations in the original paper is incorrect, and reflects a misunderstanding of what was done.

National Sample Survey data on the unit values of a large number of foods can be used to compute price index numbers that can be compared with the official national price indices, the Consumer Price Index for Agricultural Labourers for rural India, and the Consumer Price Index for Industrial Workers for urban India. This paper finds that over the five years from 1999-2000 to 2004-05, the food component of the cpial understated the rate of food price inflation. This understatement can be attributed to the use of long outdated weights (from 1983), and the resultant over-weighting of cereals, whose prices fell relative to other foods. The overall weight of food in the cpial is also too large, so that the growth in the general cpial was understated during this period when food prices fell relative to non-food prices. Under conservative assumptions, the paper calculates that the five-year growth in the reported cpial of 10.6 per cent should have been 14.3 per cent. The nominal poverty lines are also understated. As a result, and ignoring other problems with the counts, the official poverty ratio of 28.3 per cent for rural India in 2004-05 should be closer to 31 per cent; at current rates of rural poverty reduction, this eliminates more than three years of progress.

This paper explains a method that can be used to adjust the NSS 55th Round poverty estimates so as to make them comparable with earlier official estimates. After presenting the adjusted head-count ratios for all-India and each of the large states, for both urban and rural sectors, the author turns to some broader issues about poverty monitoring in India, including those raised by the non-comparability of estimates that is his main topic but looking further to issues of future survey design and the choice of poverty lines.