Inter-country Comparisons of Poverty Based on a Capability Approach: An Empirical Exercise Sanjay Reddy Department of Economics, Barnard College and Institute for Social and Economic Research and Policy, Columbia University Email: sr793@columbia.edu Sujata Visaria Department of Economics, Boston University Email: asvisaria@bu.edu Muhammad Asali Department of Economics, Columbia University Email: ma2093@columbia.edu Click here to download working paper

Abstract
The authors argue that inter-country comparisons of income poverty based on poverty line uniformly reflecting the costs of the basic requirements of human beings are superior to the existing money-metric approaches. They implement a uniform approach to poverty assessment based on basic human capabilities for three countries: Nicaragua, Tanzania and Vietnam. They compute standard errors of the resulting poverty estimates and compare the incidence of poverty across these three countries. The choice of approach affects both cardinal estimates and ordinal rankings of poverty across countries and over time. Meaningful and coherent inter-country poverty comparisons can be advanced through international co-ordination in survey design and in the construction of income poverty lines that uniformly reflect the costs of the basic requirements of human beings.