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Defining Poverty Lines As a Fraction of Central Tendency

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  • Christophe Muller

    ()
    (Universidad de Alicante)

Abstract

We show under lognormality that when the Gini coefficient is stable over time, defining the poverty line as a fraction of a central tendency of the living standard distribution restricts the evolution of the poverty measures to stability. That is, poverty does not change if the Gini coefficient does not change. Moreover, when the Gini coefficient slightly changes, most of the poverty change can be considered a change in inequality. The consequences of using different poverty lines are then analyzed. Thus, important features in studies of poverty change based on these lines may result from methodological choices, rather than from economic mechanisms.

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Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 72 (2006)
Issue (Month): 3 (January)
Pages: 720-729

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Handle: RePEc:sej:ancoec:v:72:3:y:2006:p:720-729

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Cited by:
  1. Marcelo Arbex & Enlinson Mattos, 2010. "Poverty and the Optimal General Income Tax-cum-Audit Policy," Working Papers, Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto 02-2010, Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto.
  2. Ansoms, An & McKay, Andrew, 2010. "A quantitative analysis of poverty and livelihood profiles: The case of rural Rwanda," Food Policy, Elsevier, Elsevier, vol. 35(6), pages 584-598, December.

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