Why not consider that being absolutely poor is worse than being only relatively poor?

Benoit Decerf

doi:10.1016/j.jpubeco.2017.06.003

Why not consider that being absolutely poor is worse than being only relatively poor?

Benoit Decerf

Development Finance and Public Policies

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Abstract

No current strategy to measure income poverty is able to (i) account for both its absolute and relative aspects and (ii) always consider that an individual who is absolutely poor is poorer than another individual who is only relatively poor. I propose a measure of income poverty satisfying (i) and (ii). Unlike alternative proposals satisfying (i), a decrease in a poor individual's income never reduces this measure. An application illustrates that the measure yields intuitive judgments about unequal growth experiences, for which all absolute (resp. relative) poverty measures systematically conclude that poverty has decreased (resp. increased).

Original language	English
Pages (from-to)	79-92
Number of pages	14
Journal	Journal of Public Economics
Volume	152
DOIs	https://doi.org/10.1016/j.jpubeco.2017.06.003
Publication status	Published - 1 Aug 2017

Keywords

income poverty measure
relative poverty
absolute poverty
unequal growth
Unequal growth
Relative poverty
Income poverty measure
Absolute poverty

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10.1016/j.jpubeco.2017.06.003

Cite this

@article{6f3e0cd212b74d99b4e95fbc6231705a,

title = "Why not consider that being absolutely poor is worse than being only relatively poor?",

abstract = "No current strategy to measure income poverty is able to (i) account for both its absolute and relative aspects and (ii) always consider that an individual who is absolutely poor is poorer than another individual who is only relatively poor. I propose a measure of income poverty satisfying (i) and (ii). Unlike alternative proposals satisfying (i), a decrease in a poor individual's income never reduces this measure. An application illustrates that the measure yields intuitive judgments about unequal growth experiences, for which all absolute (resp. relative) poverty measures systematically conclude that poverty has decreased (resp. increased).",

keywords = "income poverty measure, relative poverty, absolute poverty, unequal growth, Unequal growth, Relative poverty, Income poverty measure, Absolute poverty",

author = "Benoit Decerf",

note = "Funding Information: I express all my gratitude to Francois Maniquet for his many comments and suggestions. The comments of Claus Thustrup Kreiner and two anonymous referees helped greatly improve the exposition. I thank C. d{\textquoteright}Aspremont, A. Atkinson, J. Foster, F. Riedel, M. Ravallion and P. van Parijs for useful discussions as well as all the participants at the 5th ECINEQ conference (2013), the 12th meeting of the Society for Social Choice and Welfare (2014) and seminars at UCLouvain, KULeuven, Ecares, INET (Oxford) and U. Bielefeld. I thank Koen Decancq, Martin Van der Linden, Mery Ferrando, Aditi Dimri, E. Schokkaert and John Weymark who commented on earlier documents. I am grateful to CORE, my host institution for most of the time during which I worked on this research. All remaining mistakes are of course mine. Funding from the European Research Council under the EU's Seventh Framework Programme (FP/2007-2013) / ERC Grant Agreement n. 269831 and from the Fond National de la Recherche Scientifique (Belgium, mandat d{\textquoteright}aspirant FC 95720 ) are gratefully acknowledged. Publisher Copyright: {\textcopyright} 2017 Elsevier B.V. Copyright: Copyright 2017 Elsevier B.V., All rights reserved.",

year = "2017",

month = aug,

day = "1",

doi = "10.1016/j.jpubeco.2017.06.003",

language = "English",

volume = "152",

pages = "79--92",

journal = "Journal of Public Economics",