African poverty is falling and other interesting new papers

A new paper by Xavier Sala-i-Martin and Maxim Pinkovskiy show that African Poverty is Falling. The paper is also discussed by Tyler Cowen and Brian Caplan.

The conventional wisdom that Africa is not reducing poverty is wrong. Using the methodology of Pinkovskiy and Sala-i-Martin (2009), we estimate income distributions, poverty rates, and inequality and welfare indices for African countries for the period 1970-2006. We show that: (1) African poverty is falling and is falling rapidly; (2) if present trends continue, the poverty Millennium Development Goal of halving the proportion of people with incomes less than one dollar a day will be achieved on time; (3) the growth spurt that began in 1995 decreased African income inequality instead of increasing it; (4) African poverty reduction is remarkably general: it cannot be explained by a large country, or even by a single set of countries possessing some beneficial geographical or historical characteristic. All classes of countries, including those with disadvantageous geography and history, experience reductions in poverty. In particular, poverty fell for both landlocked as well as coastal countries; for mineral-rich as well as mineral-poor countries; for countries with favorable or with unfavorable agriculture; for countries regardless of colonial origin; and for countries with below- or above-median slave exports per capita during the African slave trade.

The impact of AIDS on intergenerational support in South Africa: Evidence from the Cape Area Panel Study

We use panel data collected in metropolitan Cape Town to document the role played by aging parents in caring for the children of children who die. In addition, we quantify the probabilities that older adults and the older adults' children provide financial support to orphaned grandchildren. We find significant transfers of public and private funds to older adults in households with orphans. Perhaps for this reason, we see no difference in expenditure patterns between households with orphans and other older adult households. With respect to older adults' quality of life, we find no effect of reporting that a child died, or of co-residence with orphaned grandchildren, on the older adults' reports of depression, or on their self-assessed health.

Who Should be Interviewed in Surveys of Household Income?

This study tests the null hypothesis that it is sufficient to interview only the household head to obtain accurate information on household income. The results show that using a husband’s estimate of his wife’s income does not produce statistically reliable results for poverty analysis. Estimates of the wife’s income separately provided by the husband and wife agree in only 6 percent of the studied households. This indicates that although limiting interviews to one person can reduce the time and expense of household surveys, this appears to be detrimental to accuracy, and may lead to incorrect conclusions on the determinants of poverty.