How to compare apples and oranges: Poverty measurement based on different definitions of consumption

Poverty rates calculated on the basis of household consumption expenditures are routinely compared across countries and time. The surveys which underl ie these comparisons typically differ in the types of food and non-food exp enditures included, often in ways which are easily overlooked by analysts. With several examples we demonstrate that these commonly occurring variatio ns in expenditure definitions can give rise to marked differences in povert y rates where there are no real differences in wellbeing. We show that one approach to calculating poverty lines, used with the headcount measure of p overty, can allow comparisons based on data with different definitions of c onsumption. In addition to allowing comparative poverty analysis using exis ting survey data, the results suggest that poverty monitoring could be done effectively at lower cost by alternating detailed expenditure surveys with far more abbreviated surveys.