Guidelines for Constructing Consumption Aggregates for Welfare Analysis

by Angus Deaton, Salman Zaidi

Poverty is a complex issue involving multiple aspects of deprivation, of which the lack of goods and services is only one. There is, however, consensus on the importance of using a consumption aggregate as a summary measure of living standards. Despite the widespread use of consumption aggregates, there are few guidelines on how to construct consumption aggregates from survey data.This book presents a review of the theoretical framework fundamental to the use of the consumption aggregate as a welfare measure. It offers some practical guidelines and outlines a three-part procedure for constructing a consumption-based measure of individual welfare. This book contains examples based on survey data from Ghana, Vietnam, Nepal, the Kyrgyz Republic, Ecuador, South Africa, Panama, and Brazil.

124 pages, Paperback

First published July 1, 2002

About the author

Angus Stewart Deaton is a British and American economist. In 2015, he was awarded the Nobel Memorial Prize in Economic Sciences for his analysis of consumption, poverty, and welfare.