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On the Definition and Measurement of Chronic Poverty Author info | Abstract | Publisher info | Download info | Related research | Statistics Rolf Aaberge () (Statistics Norway and IZA)
Magne Mogstad () (Statistics Norway)
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As an alternative to the conventional methods for measuring chronic poverty, this paper proposes an interpersonal comparable measure of permanent income as a basis for defining and measuring chronic poverty. This approach accounts for the fact that individuals regularly undertake inter-period income transfers. Moreover, the approach allows for individual-specific interest rates on borrowing and saving as well as for the presence of liquidity constraints. Due to the general nature the proposed method proves useful for evaluating the theoretical basis of the standard methods for measuring chronic poverty.
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number
2659.
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Length: 23 pages
Date of creation: Mar 2007Date of revision:
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Keywords: intertemporal choice liquidity constraints permanent income chronic poverty Other versions of this item:
Find related papers by JEL classification: D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
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