Measuring Seasonal Poverty
AbstractFood consumption in developing countries is highly seasonal. A typical household consumes significantly more calories and nutrients in the months after harvest than in the months preceding. Lean season consumption sometimes falls below critical thresholds necessary for children to reach their full potential in both cognitive and physical development. In Christian and Dillon (2017) we show in a long-term panel from Tanzania that conditional on average annual consumption, seasonality of consumption in childhood is associated with reduced human capital (height and educational attainment) in adulthood. This association matters for welfare measurement and targeting regardless of whether the link is causal (though we provide evidence that it is). The takeaway from that paper is that two children who are indistinguishable using standard measures of poverty, which are based on annualized consumption, will have significantly different human capital outcomes if one child's diet is more seasonal.
Having established that seasonality matters for welfare (conditional on average consumption), in this paper we develop an empirically tractable poverty measure that accounts for seasonality. Our measure is an axiomatic generalization of the Foster-Greer-Thorbecke. The intuition behind our approach is simple: a seasonality-adjusted poverty measure is an integral over the household's poverty status on each day of the year. To make the measure empirically tractable, we use an empirical approach related to that in our first paper, which relies on variation in survey timing to distinguish between predictable seasonal variation in consumption and idiosyncratic shocks. This approach differs from others in the literature, such as Ligon and Schechter (2003), in that we use a flexible, parametric specification to model seasonality. We apply our seasonally adjusted measure of poverty to consumption data from Malawi, and compare our poverty rankings to those based on the standard approach and on Ligon and Schechter (2003).