Decomposition of changes of poverty in Peru: 2004-2017

Abstract

The objective of the article was to analyze the changes that have occurred in the monetary poverty in Peru during the period 2004-2017, with the purpose of using the techniques of decomposition of changes in poverty of Datt-Ravallion and the value of Shapley of the theory of games. cooperatives, which allow to decompose the variation of poverty in effect growth and inequality effect. During the 2004-2017 period, poverty reduction was 37%, which is practically due to the economic growth effect. According to the decomposition of the value of Shapley there is a favorable economic growth effect of 49.09% and an adverse inequality effect of 12.10%; while according to the decomposition of Datt-Ravallion there is a favorable growth effect of 44.60%, an unfavorable inequality effect of 16.59% and an adverse residual effect of 8.99%. In the last 5 years the unfavorable effect of inequality has followed a growing trend; while the favorable growth effect is more modest.