Has Poverty in Venezuela Increased Under Hugo Chavez?

As I read Brad DeLong fulfilling the plea from Jonah Goldberg:

Well, we want to put up more quotes from the pages of NR, past, present and future there

I had to wonder. Brad is a very good economist and yet he provided quotes about NR’s racism and love for Joseph McCarthy but nothing on economics. Then I read Dean Baker:

It appears that Mexico is not the only Latin American country for which the media have difficulty with official statistics. Apparently, the media have been anxious to tout high poverty numbers for Venezuela. The problem appears to be that they want to cite poverty data for 2004, which showed a large upturn in the poverty rate in the immediate wake of a strike in the oil sector. The Venezuelan economy rebounded sharply in 2005, and the poverty rate predictably fell back below its previous levels. However, even though the 2005 data is now available, the media continues to use the much higher numbers from 2004.

Which reminded me of the Stephen Johnson hit piece on Venezuela’s president, Hugo Chavez:

Venezuela now rivals Haiti in poverty and underemployment.

Really?! Dean points us to a recent study from CEPR. Poverty rates in terms of the number of people before 1999 exceeded 50% but had declined to 45.4% by the end of 2001. CEPR notes the decline in poverty was attributable to strong economic growth. The oil strike, however, led to a recession and an increase in poverty. By the end of 2005, however, the number of people living below the poverty line fell to 43.7% as the economy recovered from the oil strike led recession. As CEPR notes:

How then have so many people reached a different conclusion? The most common mistake has been to use the data from the first half of 2004, which was gathered in the first quarter of that year. The household poverty rate at that time was 53.1 percent, which is of course up enormously from 1999. There are several things wrong with using this measure. Most importantly, this poverty rate is measuring the impact of the oil strike and recession of 2002-2003. Poverty rates are very sensitive to expansion and downturns in the economy, so to compare 1999 with the first quarter of 2004, leaving off the subsequent recovery, is meaningless and misleading. As noted above, the Venezuelan economy grew by 17.9 percent in 2004, and by 9.3 percent in 2005. We would expect and, in fact, did see a massive reduction in poverty from an economic recovery of this magnitude. So most of the news reports and articles alleging an increase in poverty under the Chávez administration are analogous to comparing winter temperatures to spring temperatures, and concluding on that basis that there is no global warming.

Dean is frustrated that the press does such a poor job in reporting economic matters. I guess it would be expecting too much from the National Review especially given their tendency to cherry pick variations in economic data and report them as if they are long-term trends.

And while we are on the topic of misrepresenting data, Mark Thoma catches Robert Rector relying on Heritage Foundation spin on immigration that has already been debunked by a CBPP analysis.