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Theoretical Considerations and Implications of Low Income Threshold Choices to Low Income Dynamics: A Case Study for Canada from 1999 to 2007

Author

Listed:
  • Zhe Ren
  • Kuan Xu

    (Department of Economics, Dalhousie University)

Abstract

In the traditional low income or poverty studies, we often use given low income thresholds or poverty lines. However, there is a perennial debate on how to select a low income threshold or a poverty line among several choices. This debate is relevant to a statistical agency and public policy makers. In this paper, we argue that to select a suitable low income threshold or a poverty line, we need a sound theoretical foundation for selection and we shall clearly understand the consequences of selecting one versus other thresholds. Using this Canadian case study of low income dynamics, we explain the theoretical consideration and demonstrate the consequences of selecting a low income threshold or a poverty line versus other thresholds.

Suggested Citation

  • Zhe Ren & Kuan Xu, 2012. "Theoretical Considerations and Implications of Low Income Threshold Choices to Low Income Dynamics: A Case Study for Canada from 1999 to 2007," Working Papers daleconwp2012-03, Dalhousie University, Department of Economics.
    • Handle: RePEc:dal:wpaper:daleconwp2012-03
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