Pro-poor growth and the lognormal income distribution
AbstractA widely accepted criterion for pro-poorness of an income growth pattern is that it should reduce a (chosen) measure of poverty by more than if all incomes were growing equiproportionately. Inequality reduction is not generally seen as either necessary or sufficient for pro-poorness. Because empirical income distributions fit well to the lognormal form, lognormality has sometimes been assumed in order to determine analytically the poverty effects of income growth. We show that in a lognormal world, growth is pro-poor in the above sense if and only if it is inequality-reducing. It follows that lognormality may not be a good paradigm by means of which to examine pro-poorness issues.
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Bibliographic InfoPaper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 130.
Length: 16 pages
Date of creation: 2009
Date of revision:
poverty; growth; pro-poorness; lognormal distribution;
Find related papers by JEL classification:
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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