Another Mere Addition Paradox? Some Reflections on Variable Population Poverty Measurement
AbstractDebates about poverty relief and foreign aid often hinge on claims about how many poor people there are in the world and what constitutes poverty. Good measures of poverty are essential for addressing the world poverty problem. Measures of poverty require a basis for determining who is poor and a method of aggregation. Historically, the methods of aggregation were quite simple. The headcount index (H), for instance, measures the number of poor people as a percentage of the total population. The poverty gap index for the whole population (I) takes the total aggregate shortfall from the poverty line divided by the number of people and the poverty line itself. Recently, however, economists have suggested several more complicated alternatives including Sen’s index, the Sen-Shorrocks-Thon (SST) index, and the Foster-Greer-Thorbecke (FGT) index (which, under some parameterizations is equivalent to H and I). This paper critiques several of the main poverty indexes in the literature by setting out and defending its ‘axiom’ (intuition or desiderata) for any good poverty measure. It argues that if Sen’s index, the SST, and the FGT indexes do not satisfy this ‘no mere addition axiom’, they do not provide compelling measures of anything that can intuitively be considered poverty. Next, it illustrates how these poverty indexes violate this no mere addition axiom. Finally, the paper illustrates one way of modifying the indexes to satisfy the no mere addition axiom with the FGT. It notes, however, that these alternatives will not do for all policy purposes. So, it is important to consider further how poverty indexes and axioms fare in variable population contexts.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number wp2010-120.
Length: 22 pages
Date of creation: 2010
Date of revision:
poverty; measurement; indices; philosophy; population; axiomatic;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-04 (All new papers)
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.:
- Cranfield, J. A. L. & Preckel, Paul V & Hertel Thomas W., 2007.
"Poverty analysis using an international cross-country demand system,"
Policy Research Working Paper Series
4285, The World Bank.
- Cranfield, John & Preckel, Paul & Hertel, Thomas, 2006. "Poverty Analysis Using an International Cross-Country Demand System," GTAP Working Papers 2211, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruck Tadesse).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.