Construction of a Consumption Aggregate Based on Information from POF 2008‐2009 and Its Use in the Measurement of Welfare, Poverty, Inequality and Vulnerability of Families

Abstract

Given the complexity of family and individual welfare, this study aims to explain the construction of a family consumption aggregate, using data from Brazilian Family Expenditure Survey (2008–2009), and also to measure and analyze welfare, poverty, inequality and vulnerability. Following the literature, some aspects were considered: the selection of expenditures, the analysis of extreme values, the imputation of food consumption, the user cost of durable goods and a spatial price deflator. After the definition of the family consumption aggregate, we analyzed the Generalized Lorenz Curves, social welfare functions and inequality measures. Then we presented the sensitivity of the identification exercise to different poverty lines and analyzed the severity of poverty. Finally, based on Chaudhuri et al. (2002) and Elbers et al. (2002), the vulnerability to poverty was studied taking account of area (clusters) effects. In this last exercise, the poverty line was based on half the minimum wage in 2008.