The income and consumption approach to unidimensional poverty measurement

In this chapter we compare, both on theoretical and empirical grounds, the income and consumption approaches to unidimensional poverty measurement. After reviewing the benefits and the drawbacks of using income or consumption as money-metrics of wellbeing, we turn to an empirical application to highlight the different implications of both approaches: using a novel dataset for Italy that jointly records individuals’ detailed consumption expenditure and incomes, we compare poverty incidence and composition of the group of the poor according to different resource concepts.