In a cross-country data set for developing and transitional economies, private consumption per capita from the national accounts deviates on average from mean household income or expenditure based on national sample surveys. Growth rates also differ systematically, so that the ratio of the survey mean to mean consumption from the national accounts tends to fall over time. The exceptions to these general findings are revealing, however. There are strong regional effects. The aggregate difference in the levels is due more to income surveys than to expenditure surveys. Divergence over time is mainly due to the severe data problems in the (contracting) transition economies.

Prevailing measures of relative poverty are unchanged when all incomes grow or contract by the same proportion. This property stems from seemingly implausible assumptions about the disutility of relative deprivation and the cost of social inclusion. We propose “weakly relative” lines that relax these assumptions. On calibrating our measures to national poverty lines and survey data, we find that half the population of the developing world in 2005 lived in poverty, only half of whom were absolutely poor. The total number of poor rose over 1981 to 2005 despite falling numbers of absolutely poor. With sustained economic growth, the incidence of relative poverty became less responsive to further growth. The number of relatively poor rose, just as the numbers of absolutely poor fell.

We show that subjective poverty lines can be derived using simple qualitative assessments of perceived consumption adequacy based on a household survey. We implement the method using survey data for Jamaica and Nepal. Respondents were asked whether their consumptions of food, housing, and clothing were adequate for their family's needs. The implied poverty lines are robust to alternative methods of dealing with other components of expenditure. The aggregate poverty rates accord quite closely with those based on independent “objective” poverty lines. However, there are notable differences in the geographic and demographic poverty profiles.

The hypothesis that consumption evolves over time as a martingale process is tested on household panel data for three villages in south India. A novel feature of the methodology is that it gives consistent estimates of dynamic effects in short panels. The estimated coefficients of lagged consumption are generally smaller than unity and a number of the lagged income and wealth variables are statistically significant. The results are inconsistent with the proposition that consumption equals permanent income. This is also true when the data are disaggregated by household wealth.

Private transfer payments are modeled as outcomes of a constrained social choice pro blem facing donors. The approach is applied to a large household leve l data set for Java and hypotheses are tested concerning the performa nce of the "moral economy" as a social security system. Transfer be havior is found to be very different between rural and urban areas. W hile transfer receipts and outlays are income inequality reducing in rural areas, this is not the case in urban areas. There is also evidence of transfers being targeted to disadvantaged households such as the sick, elderly, and (for urban areas) the unemployed.

Policymakers often assume that targeting observably poor households suffices in reaching nutritionally deprived individuals. We question that assumption. Our comprehensive assessment for sub-Saharan Africa reveals that undernourished women and children are spread widely across the household wealth and consumption distributions. Roughly three-quarters of underweight women and undernourished children are not found in the poorest 20% of households, and around half are not found in the poorest 40%. Countries with higher undernutrition tend to have higher shares of undernourished individuals in nonpoor households. Intrahousehold inequality accounts in part for our results, but other factors appear to be important, including common health risks.