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Negative Net Incomes and the Measurement of Poverty: A Note

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Author Info

  • Sandoval, Héctor H.

    (Consejo Nacional de Evaluación de la Política de Desarrollo Social)

  • Urzúa, Carlos M.

    ()
    (Tecnológico de Monterrey, Campus Ciudad de México)

Abstract

This note warns about the careless computation of poverty indexes when the welfare of each household is measured by its net income, since this can be negative. As is illustrated in the case of Mexico, even if only a handful of households report negative incomes, the resulting poverty aggregates, when they go beyond a mere headcount measure, can behave rather badly. The note ends with suggestions on how to deal with the problem.

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File URL: http://www.csf.itesm.mx/egade/publicaciones/articulos/3%20V3N1Urz-Hs-b.pdf
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Bibliographic Info

Article provided by Tecnológico de Monterrey, Campus Ciudad de México in its journal Revista de Administración, Finanzas y Economía (Journal of Management, Finance and Economics).

Volume (Year): 3 (2009)
Issue (Month): 1 ()
Pages: 29-36

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Handle: RePEc:ega:rafega:200903

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Web page: http://www.ccm.itesm.mx/egap/
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Keywords: Poverty measures; poverty indexes; negative income; income and expenditure survey; Mexico;

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  1. Kakwani, Nanak, 1993. "Statistical Inference in the Measurement of Poverty," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 632-39, November.
  2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  3. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
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