Pro-Poor Growth and the Lognormal Distribution
AbstractA widely accepted criterion for the pro-poorness of an income growth pattern is that it should reduce a (chosen) measure of poverty by more than if all incomes were growing equi-proportionately. Inequality reduction is not generally seen as either necessary or sufficient for pro-poorness. As empirical income distributions fit well to the lognormal form, lognormality has sometimes been assumed in order to determine analytically the poverty effects of income growth. We show that in a lognormal world, growth is pro-poor in the above sense, if and only if it is inequality-reducing. It follows that lognormality may not be a good paradigm by means of which to examine pro-poorness issues. In contrast, some popular 3-parameter forms offer the ability to conduct nuanced investigation of the pro-poorness growth-inequality nexus.
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Bibliographic InfoArticle provided by Journal of Income Distribution in its journal Journal of Income Distribution.
Volume (Year): 19 (2010)
Issue (Month): 3-4 (September-December)
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poverty; growth; pro-poorness; lognormal distribution;
Find related papers by JEL classification:
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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