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Poverty and Inequality Components: a Micro Framework

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Author Info
Abdelkrim Araar
Jean-Yves Duclos

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Abstract

This paper explores the link between poverty and inequality through an analysis of the poverty impact of changes in income-component inequality and in between -an within- group inequality. This can help shed light on the theoretical and empirical linkages between poverty, growth and inequality. It might also help design policies to improve both equity and welfare. The tools are illustrated using the recent 2004 Nigerian national household survey. The analytical derived linkages are supported by the empirical illustration, and interesting insights also emerge from the empirical analysis. One such insight is that both the sign and the size of the elasticities can be quite sensitive to the choice of measurement assumptions (such as the choice of inequality and poverty aversion parameters, and that of the poverty line). The elasticities are also very much distributive-sensitive and dependent on the type of inequality-changing processes taking place. This also suggests that the response of poverty to growth can also be expected to be significantly context specific.

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Paper provided by CIRPEE in its series Cahiers de recherche with number 0735.

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Date of creation: 2007
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Handle: RePEc:lvl:lacicr:0735

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Related research
Keywords: Poverty; inequality; poverty elasticities; redistribution;

Find related papers by JEL classification:
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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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.:
  1. Heshmati, Almas, 2004. "The Relationship between Income Inequality, Poverty and Globalisation," IZA Discussion Papers 1277, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Frazer, Garth, 2006. "Inequality and development across and within countries," World Development, Elsevier, vol. 34(9), pages 1459-1481, September. [Downloadable!] (restricted)
  3. Duclos, Jean-Yves & Echevin, Damien, 2005. "Bi-polarization comparisons," Economics Letters, Elsevier, vol. 87(2), pages 249-258, May. [Downloadable!] (restricted)
    Other versions:
  4. Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-58, May.
  5. Makdissi, Paul & Wodon, Quentin, 2002. "Consumption dominance curves: testing for the impact of indirect tax reforms on poverty," Economics Letters, Elsevier, vol. 75(2), pages 227-235, April. [Downloadable!] (restricted)
  6. Son, Hyun Hwa, 2004. "A note on pro-poor growth," Economics Letters, Elsevier, vol. 82(3), pages 307-314, March. [Downloadable!] (restricted)
  7. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January. [Downloadable!] (restricted)
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  8. Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February. [Downloadable!] (restricted)
  9. Kakwani, Nanak, 1993. "Poverty and Economic Growth with Application to Cote d'Ivoire," Review of Income and Wealth, Blackwell Publishing, vol. 39(2), pages 121-39, June.
  10. Stephan Klasen, 2003. "In Search of The Holy Grail: How to Achieve Pro-Poor Growth ?," Ibero America Institute for Econ. Research (IAI) Discussion Papers 096, Ibero-America Institute for Economic Research. [Downloadable!]
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  11. Abdelkrim Araar, 2006. "On the Decomposition of the Gini Coefficient: an Exact Approach, with an Illustration Using Cameroonian Data," Cahiers de recherche 0602, CIRPEE. [Downloadable!]
  12. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September. [Downloadable!] (restricted)
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  13. Ravallion, Martin & Datt, Gaurav, 2002. "Why has economic growth been more pro-poor in some states of India than others?," Journal of Development Economics, Elsevier, vol. 68(2), pages 381-400, August. [Downloadable!] (restricted)
  14. Abdelkrim Araar & Awoyemi Taiwo Timothy, 2006. "Poverty and Inequality Nexus: Illustrations with Nigerian Data," Cahiers de recherche 0638, CIRPEE. [Downloadable!]
  15. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287. [Downloadable!] (restricted)
  16. Yaari, Menahem E., 1988. "A controversial proposal concerning inequality measurement," Journal of Economic Theory, Elsevier, vol. 44(2), pages 381-397, April. [Downloadable!] (restricted)
  17. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May. [Downloadable!] (restricted)
  18. Essama-Nssah, B., 2005. "A unified framework for pro-poor growth analysis," Economics Letters, Elsevier, vol. 89(2), pages 216-221, November. [Downloadable!] (restricted)
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