ESTIMATING ‘GROWTH ELASTICITY OF POVERTY’ FOR ASIAN ECONOMIES

Abstract

Over the years, poverty reduction has been recognised as the main objective of development policy. To reduce poverty, economic growth is very crucial. The responsiveness of growth to wards poverty reduction is measured by the ‘growth elasticity of poverty’. The present study attempts to calculate growth elasticities of poverty in nine selected Asian countries for the period 1986-2015 by using three different methodologies. The study finds that calculated elasticities have considerable variations by using different methodologies. It is suggested that the calculation of elasticity using the formula is most appropriate because it directly calculates the elasticity by using the data of poverty rate and per capita GDP. The study also finds that China has the highest growth elasticity of poverty considering the poverty line of USD 1.90 and USD 3.20 a day. It was also found that the responsiveness of growth to poverty reduction has increased during the period of 2001-2015 in comparison to the period of 1986-2000.

Keywords

• growth
• poverty
• elasticity.