Clarifying Poverty Decomposition
AbstractI discuss how poverty decomposition methods relate to integral approximation, which is the foundation of decomposition of the temporal change of a quantity into key drivers. This offers a common framework for the different decomposition methods used in the literature, clarifies their often somewhat unclear theoretical underpinning and identifies the methods' shortcomings. In light of integral approximation, many methods actually lack a sound theoretical basis and they usually have an ad-hoc character in assigning the residual terms to the different key effects. I illustrate these claims for the Shapley-value decomposition and methods related to the Datt-Ravallion approach and point out difficulties in axiomatic approaches to poverty decomposition. Recent developments in energy and pollutant decomposition offer some promising methods, but ultimately, further development of poverty decomposition should account for the basis in integral approximation.
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Bibliographic InfoPaper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 217.
Length: 18 pages
Date of creation: 31 Aug 2006
Date of revision: 17 Nov 2008
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Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
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More information through EDIRC
poverty analysis; poverty measures; decomposition; Shapley-value; inequality;
Other versions of this item:
- Müller, Adrian, 2008. "Clarifying Poverty Decomposition," Proceedings of the German Development Economics Conference, Zurich 2008 30, Verein für Socialpolitik, Research Committee Development Economics.
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-11 (All new papers)
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