ABSTRACT
This chapter assesses changes in Brazilian welfare under the original Ahluwalia and Chenery (A&C) approach, that is, without the resource-depletion adjustments. It describes alternative measures of aggregate welfare improvement and presents estimates of changing net capital stock. From 1965 to 1976, inequality worsens substantially, yet even the poorest groups fare well in absolute terms. The observation supports claims that the enormous government subsidies given to investors for Amazonian development projects during the period produced benefits significantly in excess of total costs. The growth rates in the ‘GDP weights’ column are, as noted, precisely growth in per capita GDP, since A&C had observed that GDP growth weights individual income growth proportionately with one’s share of the total income pie. Equal weights are self-explanatory and poverty weights implies the inverse of the GDP weights, where the income growth of the poorest quintile is weighted by the income share of the richest and so on.
