ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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NAS-NSS Estimates of Private Consumption for Poverty Estimation

The fact that NSS estimates of aggregate household consumer expenditure (HCE) tend to be lower than NAS estimates of private final consumption expenditure (PFCE) has spurred suggestions to pro-rata adjust the NSS-based size distribution on the basis of this difference. Drawing on a joint CSO-NSSO exercise at cross-validation of NAS and NSS, this paper details weaknesses of both types of estimates, but shows that NAS cannot be accepted as a more reliable yardstick for either aggregate consumption expenditure or that on specific commodity groups. This is due to the inherent 'fluidity' of NAS estimates, weaknesses in their underlying database, and the fragility of the rates, ratios and norms used in the commodityflow balance underpinning the PFCE. Despite its shortcomings, it is argued that NSS is preferable because it is based on direct observations relating to the survey period and because, unlike NAS, it avoids recourse to adjustments based on arbitrary assumptions.

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