Negative Net Incomes and the Measurement of Poverty: A Note
AbstractThis note warns about the careless computation of poverty indexes when the welfare of each household is measured by its net income, since this can be negative. As is illustrated in the case of Mexico, even if only a handful of households report negative incomes, the resulting poverty aggregates, when they go beyond a mere headcount measure, can behave rather badly. The note ends with suggestions on how to deal with the problem.
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Bibliographic InfoPaper provided by Tecnológico de Monterrey, Campus Ciudad de México in its series EGAP Working Papers with number 2007-07.
Date of creation: Apr 2007
Date of revision:
Poverty measures; poverty indexes; negative income; income and expenditure survey; Mexico;
Other versions of this item:
- Sandoval, Héctor H. & Urzúa, Carlos M., 2009. "Negative Net Incomes and the Measurement of Poverty: A Note," Revista de Administración, Finanzas y Economía (Journal of Management, Finance and Economics), Tecnológico de Monterrey, Campus Ciudad de México, vol. 3(1), pages 29-36.
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-28 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
- Kakwani, Nanak, 1993. "Statistical Inference in the Measurement of Poverty," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 632-39, November.
- Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
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