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Article
Publication date: 19 October 2010

Chakrangi Lenagala and Rati Ram

By using the World Bank's new poverty data that are based on the most recent International Comparison Program report, this research aims to revisit the response of poverty rate to…

2070

Abstract

Purpose

By using the World Bank's new poverty data that are based on the most recent International Comparison Program report, this research aims to revisit the response of poverty rate to increase in real gross domestic product (GDP) per capita.

Design/methodology/approach

The response is summarized in terms of elasticity of poverty with respect to real GDP per capita, which is the ratio of annual percentage fall in poverty rate to annual percentage increase in real GDP per capita. The main calculations are done for the entire group of less‐developed countries (LDCs), poverty‐dense South Asia region, and India, which probably has the highest poverty rate. The periods studied are 1981‐1990, 1990‐1999, and 1999‐2005. The calculations are done for four different poverty measures.

Findings

Five major points are noted. First, the elasticities generally show a declining tendency over the period, indicating that poverty‐reducing impact of income growth has been weakening. Second, the elasticities show huge differences across the poverty lines, and generally decline with higher poverty lines. Third, while global elasticities for $1.00 poverty line bear some resemblance to those reported or used by many scholars, elasticities for $2.00 and 2.50 poverty rates are dramatically lower, and reinforce the view that many influential estimates show the effect of income growth on poverty to be much higher than the data indicate. Fourth, elasticities for poverty‐dense South Asia are again seen to be much lower than those for the entire LDC group. Fifth, for India, where $2.00 and 2.50 poverty rates are higher than even in Sub‐Saharan Africa, the elasticities are extremely low and have been declining despite an acceleration in income growth. The overall implication seems to be that income growth has generally been less pro‐poor during the globalization era of the 1990s and the 2000s than during the 1980s. In particular, income growth in India seems to have had an extremely small impact on poverty, and that impact, notably for $1.00 and 1.25 poverty lines, has been declining.

Originality/value

First, although there is a vast literature on growth elasticities of poverty, this seems to be the first study that uses World Bank's new poverty data to judge the impact of income growth on poverty. Second, this is the only study that directly estimates and compares elasticities for the four poverty lines of $1.00, 1.25, 2.00, and 2.50, and shows large differences in the elasticities for different poverty lines. Third, this is probably the only work that compares elasticities for the 1980s, 1990s, and the 2000s. Fourth, although some indication of very low elasticities for South Asia and India does exist in a recent study, $2.50 elasticities reported in the present work for India, and even South Asia, should constitute an eye‐opener for scholars, policy‐makers, and international organizations in regard to the potential role of income growth in poverty reduction. Fifth, the observed decline in most elasticities during the 1990s and 2000s, as compared with the 1980s, despite higher income levels and growth rates, may shed light on the likely role of globalization in reducing poverty.

Details

International Journal of Social Economics, vol. 37 no. 12
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 August 1979

André Gabor

“In the provision of terminology and apparatus to aid thought I do not think that Marshall did economists any greater service than by the explicit introduction of the idea of …

Abstract

“In the provision of terminology and apparatus to aid thought I do not think that Marshall did economists any greater service than by the explicit introduction of the idea of ‘elasticity’.”

Details

Management Decision, vol. 17 no. 8
Type: Research Article
ISSN: 0025-1747

Article
Publication date: 1 December 1998

Andrés Vázquez

This paper presents a simple alternative measure for the arc elasticity of demand that comes naturally and possesses some attractive properties. In particular, it equals the point…

2546

Abstract

This paper presents a simple alternative measure for the arc elasticity of demand that comes naturally and possesses some attractive properties. In particular, it equals the point demand elasticity at some point inside the interval, thus leading to the exact estimations of demand elasticity when this is constant. It also yields narrower values that Dalton’s, Lerner’s and Allen’s widely used measures, and its relationships with the arc revenue elasticities keep exact analogy with those established for the point elasticity case.

Details

Journal of Economic Studies, vol. 25 no. 6
Type: Research Article
ISSN: 0144-3585

Keywords

Book part
Publication date: 23 November 2015

James Langenfeld, Jonathan T. Tomlin, David A. Weiskopf and Georgi Giozov

To develop a framework for systematically defining the relevant market for intermediate goods that incorporates downstream market conditions.

Abstract

Purpose

To develop a framework for systematically defining the relevant market for intermediate goods that incorporates downstream market conditions.

Methodology/approach

We combine the well-established “Hicks-Marshall” conditions of derived demand for inputs with “critical loss/critical elasticity of demand” to yield insights into the definition of antitrust markets for intermediate goods and the competitive effects from a merger.

Findings

We show that examining “Hicks-Marshall” conditions can provide a more rigorous framework for analyzing relevant markets for intermediate goods. We also show that solely examining demand substitution possibilities for direct customers of an input can lead to an incorrect market definition.

Research limitations/implications

Our framework may be difficult to apply in circumstances when several different downstream products use the input being examined and each of those downstream products has a different elasticity of demand.

Practical implications

We illustrate how reasonable ranges for key parameters relating to the ability of firms to substitute to other inputs and to adjust to downstream market conditions will often be sufficient to define antitrust markets for intermediate goods in practice.

Originality/value

Previous antitrust analysis has not systematically analyzed the impact of downstream market conditions in assessing market definition for intermediate goods. The framework we develop will be useful to future researchers attempting to define relevant markets for intermediate goods and evaluating the competitive effects of a merger.

Details

Economic and Legal Issues in Competition, Intellectual Property, Bankruptcy, and the Cost of Raising Children
Type: Book
ISBN: 978-1-78560-562-8

Keywords

Abstract

Details

Handbook of Transport Modelling
Type: Book
ISBN: 978-0-08-045376-7

Book part
Publication date: 24 May 2021

Wenqing Li, Nathan Petek and Hassan Faghani

When products are differentiated, applying the standard critical loss formula to assess whether it is profitable for a hypothetical monopolist to impose a common price increase…

Abstract

When products are differentiated, applying the standard critical loss formula to assess whether it is profitable for a hypothetical monopolist to impose a common price increase can lead to delineating an antitrust market that is too broad by setting a critical loss threshold that is too low. This error is particularly likely to occur when the products exhibit very different per-unit profits, own price elasticities, and cross price elasticities. In particular, different per-unit profits are a necessary condition for this error to occur and this difference is more likely to be driven by an asymmetry in prices than by an asymmetry in costs when own price elasticities are moderate in magnitude. In contrast, differences in the quantity sold of each product do not tend to lead to errors in market definition. Given the issues associated with the standard critical loss analysis, critical loss analysis with asymmetric price increases and the gross upward pricing pressure index are practical alternative approaches for conducting market definition analysis when products in a candidate market are differentiated.

Details

The Law and Economics of Patent Damages, Antitrust, and Legal Process
Type: Book
ISBN: 978-1-80071-024-5

Keywords

Abstract

Details

Patent Activity and Technical Change in US Industries
Type: Book
ISBN: 978-0-44451-858-3

Book part
Publication date: 2 December 2021

Suman Seth and Sabina Alkire

Post reform India has generated high economic growth, yet progress in income poverty and many other key development outcomes has been modest. This chapter primarily examines how…

Abstract

Post reform India has generated high economic growth, yet progress in income poverty and many other key development outcomes has been modest. This chapter primarily examines how inclusive economic growth has been in India between 2005–2006 and 2015–2016 in reducing multidimensional poverty captured by the global multidimensional poverty index (MPI). The authors employ a constellation of elasticity and semi-elasticity measures to examine vertical, horizontal as well as dimensional inclusiveness of economic growth. Nationally, the authors estimate that a 1% annual economic growth in India during their study period is associated with an annual reduction in MPI of 1.34%. The association of the national growth to state poverty reduction (horizontal inclusiveness) is, however, not uniform. Some states have been successful in reducing poverty faster than the national average despite slower economic growth between 2005–2005 and 2015–2016; whereas, other states have been less successful to do so despite faster economic growth during the same period. The authors’ analyses and findings show how these tools may be used in practical applications to measure inclusive growth and inform policy.

Details

Research on Economic Inequality: Poverty, Inequality and Shocks
Type: Book
ISBN: 978-1-80071-558-5

Keywords

Abstract

Details

Functional Structure and Approximation in Econometrics
Type: Book
ISBN: 978-0-44450-861-4

Abstract

Details

Unfunded Pension Systems: Ageing and Variance
Type: Book
ISBN: 978-0-44451-732-6

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