Alternative Approach to Poverty Measurement : An Experiment with Thai Data

The TDRI has traditionally calculated poverty incidence for Thailand using the method originally developed by the World Bank in the late 1970s. The approach has increasingly been questioned, both for academic reasons and for practical reasons, especially when there are implications for poverty alleviation programs. For academic reasons, the approach ignores several fundamental changes of factors constituting the calculation of poverty incidence, most notably changes in consumption patterns (which reflect changes in living standards over the 30-years since the calculation of the original poverty lines) and the associated prices. To a lesser extent there are demographic changes between and within Thai households. For practical reasons, the rapid reduction of poverty incidence obtained from the World Bank approach implies a poverty level that is unrealistically too low from a policy point of view.