-12-

reference to the composition of the<sup>diet; extreme-poverty is measured with</sup> respect to a diet based on the preferences<sup>of individuals as well as the</sup> prices ruling in the areal<sup>2</sup> . Third, the target level of 2250<sup>calories a day</sup> per adult equivalent is taken from<sup>WHO/FAO food adequacy standards</sup> 13 . appropriately modified to the<sup>climatic conditions of developing countries</sup> Satisfaction of this calorie intake<sup>avoids undernutrition and permits</sup> individuals to, in principle, stay<sup>healthy and participate in an active life</sup> (including satisfactory performance<sup>of tasks in the labor market).</sup> Conversely, risks of severe<sup>undernutrition</sup> with permanent effects (particularly for children under<sup>five), above-normal vulnerability to disease,</sup> and anthropometric deficiencies appear<sup>when calorie intakes are, for a</sup> sustained period of time, below this<sup>level (Lipton (1983a)).</sup> The use of nutritional status as<sup>a benchmark for measuring extreme-</sup> poverty is not without problems.<sup>This is because the same nutritional intake</sup> is taken as reference point for all<sup>the (adult equivalent) population. This</sup> procedure is problematic because even<sup>after making corrections for climate and</sup> work ronditions, it fails to account<sup>for intra and inter-individual</sup> variations 14 in nutritional requirements . Some researchers, moreover, claim<sup>that the</sup> 12This contrasts with 'minimum cost' diets found using linear programming techniques that also satisfy a<sup>nutritional objective. This technique was used</sup> by Coplarar to measure undernutrition<sup>(Coplamar, 1985a, pp. 101-23). But note</sup> that the calculated diet may not<sup>be desired by households, since it is derived</sup> independently of their preferences.<sup>Significant econometric evidence shows</sup> that issues like palatability,<sup>status, and odor matter in food selection, even</sup> at very low income levels<sup>(see the discussion in section VI.1, below). The</sup> approach also contrasts with<sup>exogenoulsy given diets either chosen by</sup> nutritionists or government<sup>agencies that specify target levels of individual</sup> foods. Rationality of the extremely-poor is assumed, given their information.

13See the extensive discussion in Lipton (1983a). Many other studies for LDC's also use this reference<sup>point (e.g. Greer and Thorbecke (1986a) for</sup> Kenya). However, the World<sup>Bank (1989b, p. 32) uses a reference point of</sup> 2,120 for Mexico; a similar<sup>number is used by Lustig (1984) and Cepal (1990)).</sup> On the other hand, the National<sup>Institute of Nutrition sets the standard at</sup> 2,600.

14Srinivasan (1981, p. 17) argues that: "Many of the widely used procedures for assessing nutritional<sup>status, by classifying all individuals in</sup> a population as malnourished<sup>who have intakes belowasingle average norm for</sup> the population as a whole, thereby<sup>ignoring intra and inter individual</sup> variance in intakes and requirements, will misclassify individuals<sup>to varying</sup> degrees. This misclassification bias need not cancel out for<sup>the population</sup> as a whole and there is danger<sup>of overestimating</sup> the proportion of truly malnourished" (emphasis added,<sup>S.L.).</sup>