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On the contribution of the three I's of poverty to chronic and transitory poverty

Author

Listed:
  • Osnat Israeli

    (Department of Economics, Ashkelon Academic College, Israel)

  • Michal Weber

    (Department of Management, Bar-Ilan University, Israel)

Abstract

This paper uses the Watts poverty index in order to derive a breakdown of poverty into chronic and transitory poverty. Following a paper by Chakravarty et al. (2008), we then suggest a new decomposition of these two components. Using the new decomposition, we are able to analyze the contribution of the "three I's of poverty" (see, Jenkins and Lambert, 1997), the incidence of poverty (i.e. the head count ratio), intensity (depth) of poverty (i.e. the Watts poverty gap ratio) and inequality among the poor (i.e. the mean logarithm deviation index of income inequality among the poor) to chronic and transitory poverty. An empirical illustration is also presented, based on a panel built by the Central Bureau of Statistics in Israel on the basis of administrative data during the period 1995-2006. The results show that chronic poverty is 57% of total poverty, and is affected more by the intensity (depth) of poverty than by inequality among the poor, while transitory poverty is roughly equally affected by the three I's of poverty.

Suggested Citation

  • Osnat Israeli & Michal Weber, 2011. "On the contribution of the three I's of poverty to chronic and transitory poverty," Economics Bulletin, AccessEcon, vol. 31(2), pages 1496-1508.
    • Handle: RePEc:ebl:ecbull:eb-10-00720
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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I2-P140.pdf
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    References listed on IDEAS

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    1. Joan R Rodgers & John L. Rodgers, 2010. "Chronic and Transitory Poverty over the Life Cycle," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(2), pages 117-136.
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    Cited by:

    1. Tomson Ogwang, 2022. "The regression approach to the measurement and decomposition of the multidimensional Watts poverty index," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(4), pages 951-973, December.

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    More about this item

    Keywords

    chronic poverty; transitory poverty; Watts index; decomposition;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • D3 - Microeconomics - - Distribution

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