"Poverty at Higher Frequency"

Joshua Merfeld and Jonathan Morduch

National poverty rates are meant to track the share of populations that are poor in a given year. We show that, instead, de facto poverty rates often reflect the fraction of the year that households experience poverty. This transformation arises in low- and middle-income countries that follow expert guidelines for collecting household expenditure data. The de facto measures reflect seasonal variability and register deprivations of households not usually considered poor. With panel data from India we show how, contrary to historical definitions, global poverty depends on households’ abilities to smooth consumption within the year.

Wagner Faculty
Financial Access Initiative