Table 6: Estimation results of regressions on log expenditures with DB classifications

||||Log of per|capita nominal|consumption exp|enditures|||
|---|---|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|
||All|All|All|Urban|All|All|All|Urban|
|Core|0_._550<sup>_∗∗∗_</sup>|0_._303<sup>_∗∗∗_</sup>|0_._204<sup>_∗∗∗_</sup>|0_._270<sup>_∗∗∗_</sup>|0_._440<sup>_∗∗∗_</sup>|0_._239<sup>_∗∗∗_</sup>|0_._155<sup>_∗∗∗_</sup>|0_._176<sup>_∗∗∗_</sup>|
||(0_._010)|(0_._009)|(0_._010)|(0_._009)|(0_._011)|(0_._010)|(0_._010)|(0_._010)|
|Suburb|0_._073<sup>_∗∗∗_</sup>|0_._004|_−_0_._013||0_._068<sup>_∗∗∗_</sup>|0_._002|_−_0_._015||
||(0_._011)|(0_._010)|(0_._010)||(0_._011)|(0_._010)|(0_._010)||
|Town|_−_0_._022<sup>_∗∗_</sup>|_−_0_._049<sup>_∗∗∗_</sup>|_−_0_._038<sup>_∗∗∗_</sup>||_−_0_._039<sup>_∗∗∗_</sup>|_−_0_._059<sup>_∗∗∗_</sup>|_−_0_._046<sup>_∗∗∗_</sup>||
||(0_._010)|(0_._010)|(0_._010)||(0_._010)|(0_._010)|(0_._010)||
|Spatial defator|||||0_._802<sup>_∗∗∗_</sup>|0_._502<sup>_∗∗∗_</sup>|0_._413<sup>_∗∗∗_</sup>|0_._826<sup>_∗∗∗_</sup>|
||||||(0_._029)|(0_._026)|(0_._025)|(0_._034)|
|Country FE|_Y es_|_Y es_|_Y es_|_Y es_|_Y es_|_Y es_|_Y es_|_Y es_|
|Demographic|_No_|_Y es_|_Y es_|_Y es_|_No_|_Y es_|_Y es_|_Y es_|
|Education|_No_|_Y es_|_Y es_|_Y es_|_No_|_Y es_|_Y es_|_Y es_|
|Employment|_No_|_No_|_Y es_|_No_|_No_|_No_|_Y es_|_No_|
|Adjusted R2|0_._523|0_._655|0_._667|0_._699|0_._531|0_._658|0_._670|0_._705|
|Nr. of countries|16|16|16|16|16|16|16|16|
|Nr. of hh|134787|134787|134787|88450|134630|134630|134630|88450|

Source: International Urban Poverty Database. Note: *** p < 0.01, ** p < 0.05, *** p < 0.1. Robust standard errors in parentheses. WorldPop 250m is used for the DB method. The dependent variable is the log of per capita consumption expenditures, expressed in PPP and not spatially deflated. Only urban households (“Core” or “Suburb”) are included in specifications (4) and (8). The baseline category is “Other rural” in all specifications, except (4) and (8), where it is “Suburb”. Demographic control variables include household size and household head’s age, sex, and marital status. Education is a categorical control variable that summarizes the education of the household head in seven categories. Employment is a categorical control variable that summarizes the household head’s labor status and employment sector.

significantly higher urban shares and lower rural shares compared to the results obtained with the official urban definitions. In 4 out of 16 SSA countries, more than half of the poor populations reside in urban areas.<sup>27</sup> It is worth noting that within DB rural areas, towns accommodate a large share of poor populations, even higher than other low-density rural areas in many countries. Additionally, poverty is more concentrated in urban cores than in suburbs. While poverty rates tend to be lower than in the suburbs, the relatively high population shares in urban cores contribute to a greater concentration of poverty there. A higher poverty line further accentuates the difference between dense and less dense urban areas, as density reduces the probability of being poor.

The change in the urban share of poor populations based on the update of urban definitions and spatial deflators differs between the DOU and DB approaches (Figure 7). When shifting from the official urban definitions to the DOU approach (Panel A), a few countries, such as Uganda, Tanzania, and Ethiopia, show substantial increases in the urban shares of the poor. On the other hand, when using the DB approach (Panel B), most countries increase the urban share of poor populations. It is also evident that the urban shares of poor populations are generally higher when the DB approach is used compared to the DOU approach (Panel C). It is important to emphasize that the choice of DOU and DB approaches significantly alters the spatial distributions of poverty. This is not the case for poverty incidence, as observed in an earlier section. The DB approach, being relative and specific to each country, is less sensitive to the overall average population density of the country and better captures the local variations in population density within individual countries, even when they have relatively high or low average population density.

The cross-comparison of urban and poverty status of individuals across the three urban definitions (official, DOU, and DB) confirms that changes in the spatial distributions of poverty are primarily due to the reclassification of the poor from rural to urban areas. Table 8 provides a summary of the reclassifications with and without spatial deflators. When examining the switch from the official urban definition to the DOU approach (Panel A), approximately 21 percent of the non-poor rural population and 17 percent of the poor rural population are reclassified from rural to urban

> 27See Figure A6 and Figure A7 in Appendix A for each country’s urban/rural shares.

19