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Measuring Aggregate Welfare in Developing Countries: How Well Do National Accounts and Surveys Agree?

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.