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The Poverty Burden: A Measure of the Difficulty of Ending Extreme Poverty

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  • Quiggin, John
  • Mahadevan, Renuka

Abstract

In this paper, we consider an extension of the commonly used poverty gap measure that may be used to address he question of whether the elimination of poverty is a feasible objective, given sufficient political commitment. The resources potentially available to address poverty may be measured by the total amount by which the incomes of the non-poor exceed the same poverty line. The ratio of the poverty gap to the resources potentially available is equal to the proportional tax rate on incomes in excess of the poverty line that would be required to fund a transfer sufficient to raise the incomes of all poor people to the poverty line. We refer to this ratio as the ‘poverty burden’ (PB). We provide a formal definition of the poverty burden and an analysis of its properties as a poverty measure.

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Bibliographic Info

Paper provided by University of Queensland, School of Economics in its series Risk and Sustainable Management Group Working Papers with number 151524.

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Date of creation: 30 Mar 2010
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Handle: RePEc:ags:uqsers:151524

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Keywords: Index numbers; Poverty; Aid; Food Security and Poverty; Health Economics and Policy; C43; I32; F35;

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  1. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
  2. Vaughan, R N, 1987. "Welfare Approaches to the Measurement of Poverty," Economic Journal, Royal Economic Society, vol. 97(388a), pages 160-70, Supplemen.
  3. Foster, James E, 1998. "Absolute versus Relative Poverty," American Economic Review, American Economic Association, vol. 88(2), pages 335-41, May.
  4. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages F191-F216, 06.
  5. Blakorby, Charles & Donaldson, David, 1980. "Ethical Indices for the Measurement of Poverty," Econometrica, Econometric Society, vol. 48(4), pages 1053-60, May.
  6. Oecd, 2002. "Aid volume, channels and allocations for poverty reduction," OECD Journal on Development, OECD Publishing, vol. 3(3), pages 33-46.
  7. Raghuram Rajan & Arvind Subramanian, 2005. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," IMF Working Papers 05/127, International Monetary Fund.
  8. Shorrocks, Anthony F & Foster, James E, 1987. "Transfer Sensitive Inequality Measures," Review of Economic Studies, Wiley Blackwell, vol. 54(3), pages 485-97, July.
  9. Anand, Sudhir, 1977. "Aspects of Poverty in Malaysia," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 23(1), pages 1-16, March.
  10. Mark J Machina, 1982. ""Expected Utility" Analysis without the Independence Axiom," Levine's Working Paper Archive 7650, David K. Levine.
  11. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  12. Ravallion, Martin, 1996. "Issues in measuring and modeling poverty," Policy Research Working Paper Series 1615, The World Bank.
  13. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  14. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
  15. Beckerman, W, 1979. "The Impact of Income Maintenance Payments on Poverty in Britain, 1975," Economic Journal, Royal Economic Society, vol. 89(354), pages 261-79, June.
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Cited by:
  1. Ceriani, Lidia & Verme, Paolo, 2013. "The income lever and the allocation of aid," Policy Research Working Paper Series 6367, The World Bank.

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