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On the Definition and Measurement of Chronic Poverty

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  • Rolf Aaberge

    ()

  • Magne Mogstad

Abstract

As an alternative to the conventional methods for measuring chronic poverty, this paper proposes to use an interpersonal comparable measure of permanent income as a basis for defining and measuring chronic poverty. This approach accounts for the fact that individuals may undertake inter-period income transfers if it is to their advantage. Moreover, it allows for individual-specific interest rates on borrowing and saving as well as for the presence of liquidity constraints. Due to its general nature the proposed method proves useful for evaluating the theoretical basis of the standard methods for measuring chronic poverty.

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File URL: http://www.icer.it/docs/wp2006/ICERwp36-06.pdf
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Bibliographic Info

Paper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 36-2006.

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Length: 22 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:icr:wpicer:36-2006

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Keywords: Intertemporal choice; liquidity constraints; permanent income; chronic poverty.;

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Cited by:
  1. Duclos, Jean-Yves & Araar, Abdelkrim & Giles, John T., 2006. "Chronic and Transient Poverty: Measurement and Estimation, with Evidence from China," IZA Discussion Papers 2078, Institute for the Study of Labor (IZA).
  2. Luigi Fabbris, Irene Sguotti, 2013. "Measuring Chronic Poverty In Italy," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - Italian Review of Economics, Demography and Statistics, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 0(2), pages 99-122, April-Jun.

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