Estimating poverty properly

Once again, poverty estimations are creating a needless debate over what is a modest measurement problem. For many years since 1973, the government had followed a simple formula: if a household could not afford to buy a minimal number of calories and clothing for its members, it was deemed as a household below the Planning Commission poverty line. But there was one problem: survey respondents tend to systematically under-report their expenditure. And so, in the past, reported expenditure was treated as being different from actual expenditure, and this under-reporting was adjusted for. 

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