The Assessment of Absolute Poverty Lines Consistency in Provinces of Iran: The Revealed Preference Approach

Some studies revealed that, where the level of regional development, climatic conditions, and the relative food prices are considerably varying across regions, determining one national poverty line for all the regions may not disclose regional disparities and does not provide a true picture of poverty in the country. In such circumstances, specifying regional specific poverty lines are preferred to the one national proverty line. The present study tries to test the suitability of the national poverty line in measuring the level of poverty in the provinces of Iran, using the revealed preference principles. To this end, provincial absolute poverty lines are estimated and tested for utility based consistency using revealed preference theory and data on food consumption patterns of Iranain households, generated by the National Nutrition and Food Technology Research Institute and Statistical Centre of Iran in 2012. Results indicate that in most of the provinces, the estimated absolute poverty linesare not consistence even after imposing some adjustment. Consequently, the use of one national poverty line would not appropriately reflect the povertly lines in different provinces of Iran. This suggests that a separate poverty food basket is required to be specified for each of the provinces based on the more available food items in each provinces, and a provincial poverty line has to be defined accordingly.