Robustness of Subjective Welfare Analysis in a Poor Developing Country” World Bank Policy Research Working Paper 3191

We analyze the subjective perceptions of poverty in Madagascar in 2001 and their relationship to objective poverty indicators. We base our analysis on survey responses to a series of subjective perception questions. We extend the existing empirical methodology for estimating subjective poverty lines on the basis of categorical consumption adequacy questions. Based on this methodology we calculate the household-specific, subjective poverty lines and compare the poverty profiles derived from different subjective welfare questions. Our results show that the aggregate poverty measures derived from consumption adequacy questions accord quite well with the poverty measures based on objective poverty lines. The subjective welfare analysis can be used in poor developing countries for evaluating socioeconomic and distributional impacts of various policy intervention